Discover the essential steps to ensure your insurance claim is paid. Learn about common pitfalls, the importance of accurate disclosure, and how to navigate disputes effectively.
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The message is simple: even small omissions can have major consequences.
Insurance claims are where the insurance promise becomes real. But they are also where misunderstandings surface most sharply. In many cases, disputes are not driven by a single dramatic event but by gaps between expectation, policy wording and disclosure.
The foundation of insurance is trust and accuracy: Claims are always where the insurance promise becomes real. That’s also why I always say: insurance is not just a policy document; it is a relationship of trust, accuracy and preparation. Most claim disputes are not caused by one dramatic technicality, but by a mismatch between what the client believes they bought, what the policy actually covers, and what information was disclosed when the cover was arranged or the claim was submitted.
Understanding why claims are rejected is therefore less about blame and more about clarity - how policies work, what they require, and where people most often fall short.
I would like to emphasise the import role of a broker: They help clients ask the right questions, understand the cover, review changes in their lives and make sure the policy still matches the risk.
Five areas that can make or break a claim
There are five broad categories that consistently appear in disputes between insurers and policyholders:
First: the claim falls outside the policy wording. This includes exclusions, limits, ‘no insured peril’ situations, or circumstances where the event does not meet the policy’s definition of a covered loss.
Second: non-disclosure or misrepresentation. People sometimes forget, minimise, or deliberately omit information — previous claims, previous policy cancellations, regular drivers, business use of a vehicle, security changes, property renovations, or changes to risk address.
Third: failure to comply with policy conditions. A classic example is a theft claim where the policy required a linked alarm, burglar bars, a tracking device, or specific security measures, and those conditions were not in place or not activated.
Fourth: poor maintenance. This is especially relevant for homeowners’ claims.
Fifth: underinsurance. Technically this is not always a rejection; it is often a reduced payout. But to the consumer it feels exactly like a rejection…
These five areas account for the majority of disputes, particularly in motor and household claims where exclusions, security requirements and maintenance obligations frequently come into play.
Where consumers most often go wrong
Even when cover exists, claims can fail because of how they are handled after the loss. Colman points to a few recurring mistakes:
Not reporting the claim quickly enough or not following the insurer’s claims process. Repairing, replacing or throwing away evidence too soon, before the insurer has had a chance to assess the damage. Giving incomplete or inaccurate information, even when the person thinks the detail is minor.
The biggest mistake is trying to manage the claim emotionally instead of procedurally.
In practice, this means that stress often leads to rushed decisions and those decisions can directly affect the outcome of a claim.
Honesty and disclosure: the backbone of insurance
Insurance depends entirely on truthful disclosure. It’s absolutely critical. Insurance is a contract of good faith. That sounds old-fashioned, but it is still the heartbeat of insurance.
Problems can arise both when taking out a policy and when submitting a claim: If a client fails to disclose material information when taking out cover, the insurer may argue it would either not have accepted the risk or would have charged a different premium or imposed different conditions.
And the consequences can be severe:
Claim rejected.
Policy cancelled.
Policy voided from inception.
Difficulty getting future insurance.
Potential fraud investigation in serious cases.
Why claims disputes keep happening
Across motor, home, and theft claims, the same friction points appear repeatedly:
Insurance is there for the worst day,, but the work is done on an ordinary day - when you review your cover, ask questions, update your sums insured and make sure the policy still matches your life.
The role of the Ombudsman: when things go wrong, fairness matters
When disputes cannot be resolved directly between the insurer and the client, the National Financial Ombuds Scheme South Africa becomes a critical safeguard in the system.
The NFO is extremely important. It is one of the most important consumer-protection mechanisms in financial services. The NFO is the place where the ordinary consumer gets a fair hearing without needing to go straight to court. Litigation is expensive and intimidating. Most consumers do not have the time, money or technical insurance knowledge to fight a large institution alone. The NFO gives them an independent forum where the facts, the law, the policy wording and fairness can be considered.
Importantly, the Ombudsman does not exist only for consumers - it strengthens the system as a whole:
It’s also important for insurers. It improves trust in the industry, highlights recurring problem areas, and pushes everyone - insurers, brokers and clients - toward better behaviour.
The scale of its work shows its importance in real terms. In 2025, the NFO opened 50,065 cases, closed 34,277 cases and recovered about R442.99 million for complainants. This makes it one of the most significant checks and balances in South Africa’s financial services landscape.
Final thought
Claims are rarely rejected without reason but they are often rejected because expectations and reality don’t align.
The Ombudsman provides a crucial safety net when disputes arise, but the strongest protection still lies at the beginning of the process: accurate information, proper maintenance, and ongoing policy reviews.
The key message is that a good claim outcome does not start on the day something goes wrong. It starts much earlier, when the correct information is disclosed, the right questions are asked, the sums insured are reviewed and the client understands the conditions attached to the policy.
A claim is paid from the quality of the policy you built before the loss.
* Colman is the CEO and Founder of Ami Underwriting Managers.
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