Stan Bezuidenhout on regular drivers and insurance

Insurance policies are a cornerstone of financial security, providing individuals and families with protection against unexpected losses. However, recent observations suggest that insurers may be intentionally crafting policy wording to be ambiguous, allowing them to subjectively deny claims based on their current financial stance or claims ratio. This practice is particularly evident in the interpretation of the term “regular driver,” which remains undefined despite numerous inquiries to South African insurers.

The Ambiguity of "Regular Driver"

In May 2024, a survey was conducted via Twitter where multiple South African insurers were asked to clarify what constitutes a “regular driver.” The responses, or lack thereof, revealed a troubling inconsistency. No insurer could provide a clear, definitive answer on how this term is measured or applied. Some required advance notification for any changes, while others stated it referred to “the person who drives the car most regularly in any month.” However, no insurer could specify whether this meant the individual who completes the most trips, spends the most time driving, or drives the most miles.

Such ambiguity is not merely academic; it has real-world consequences. Below are examples that illustrate how this lack of clarity can lead to significant issues for policyholders.

Case Study 1: Unpredictable Driving Patterns

Consider a household with one car shared by a husband and wife. They alternate driving to work and dropping off their children at school. If one falls ill, the other naturally takes on more driving duties. This scenario is unpredictable, and they cannot foresee these changes in advance to inform their insurer. If the so-called “regular driver” ends up using the car less than 50% of the time in a given month, their claim might be denied based on technicalities, particularly if the insurer is inclined to minimize payouts when the claim amount is substantial.

Case Study 2: Distance vs. Time vs. Trips

In another example, a husband drives 30 kilometers to work on a relatively traffic-free highway, while his wife drives 5 kilometers through congested city streets. Despite making the same number of trips, the husband covers more distance, but the wife spends more time in high-risk driving conditions. Insurers could manipulate the definition of “regular driver” based on distance, time, or number of trips to suit their needs, effectively putting the couple at the mercy of the insurer’s subjective interpretation.

Case Study 3: The Parking Space Trap

A particularly egregious case involved a couple who shared driving responsibilities. After a serious accident, an insurance-appointed investigator visited the husband’s workplace. Based on the husband’s consistent use of a specific parking spot, the insurer concluded he was the “regular driver” despite the car being registered under the wife’s name and both sharing driving duties. The insurer denied the claim, leaving the wife to bear the financial burden of the car loan and the aftermath of the accident. Without the resources to contest the decision legally, she faced severe financial hardship.

Insurance as a Rigged Game

These examples underscore a critical issue: the ambiguous language in insurance policies creates a situation where insurers hold all the cards. By maintaining vague terms like “regular driver,” insurers can shift their stance based on the situation, effectively stacking the deck against policyholders. This practice resembles the operations of a casino, where the house always has the edge.

The Need for Clear Definitions and Fair Practices

The insurance industry must address this ambiguity by providing clear, unequivocal definitions of key terms within their policies. Regulatory bodies should enforce these standards to ensure fairness and transparency. Policyholders should not have to gamble on the likelihood of their claims being honored due to vague contractual terms.

Insurance is meant to be a safety net, not a game of chance. By holding insurers accountable and demanding clarity, we can protect consumers from being unfairly denied the coverage they rightfully expect and have paid for. This is not merely a legal necessity but a moral imperative to restore trust in the insurance system.

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