How to complain to the Ombudsman for Short-Term Insurance

If you are looking for the Ombudsman for Short-Term Insurance, that office no longer operates under that name. It merged into the National Financial Ombud Scheme of South Africa, which now handles non-life insurance complaints alongside long-term insurance, banking and credit complaints. The service does the same job, it is still free to consumers, and you still do not need an attorney. Older letters, policy documents and websites may still refer you to the old office, so do not be confused if you see the old name.

Before you lodge, you normally have to finish the insurer's own internal complaints process. And do not sit on it. The scheme's rules give you a limited period after the insurer's final decision to bring the complaint, so lodge as soon as you have that decision rather than waiting to see if the insurer changes its mind.

What the ombud can deal with

Complaints against a short-term or non-life insurer, including:

• motor claims that were rejected, underpaid or delayed
• homeowner and household contents claims, including storm, fire, geyser and burst pipe disputes
• cellphone and portable possessions claims
• travel insurance disputes
• disputes about how the insurer applied average because you were under-insured
• disputes about excess, write-offs and the valuation of a total loss
• poor claims handling and unreasonable delay

What it cannot deal with

• Complaints about the advice you were given when the policy was sold, or about a broker's conduct. That goes to the FAIS Ombud.
• Medical scheme disputes, which go to the Council for Medical Schemes.
• Retirement fund disputes, which go to the Pension Funds Adjudicator.
• Matters already before a court, or matters that have already been decided by a court.
• Claims above the scheme's monetary jurisdiction, which changes from time to time. Check the current limit before you lodge.

Step one: exhaust the insurer's internal process

Write to the insurer's complaints or disputes department, not the call centre. Set out your policy number, claim number, the date of the loss, the date of the rejection or the underpayment, the reason the insurer gave in its own words, and why you say it is wrong. Attach your evidence. Ask for a final written decision.

Keep every email. The ombud will want to see that you gave the insurer a chance to fix it.

For the arguments that tend to work against the common rejection grounds, read My insurance claim was rejected. What can I do?.

Step two: lodge with the ombud

You can lodge online through the scheme's website, by email or by post. Complaints can be lodged in writing by the policyholder personally.

Send a short covering summary and let the documents do the work. Include:

1. Your name, ID number, contact details and postal or email address.
2. The insurer's name, your policy number and the claim number.
3. The date of the loss and a short factual account of what happened.
4. The insurer's rejection or decision letter.
5. Your policy schedule and the wording that applied on the date of the loss.
6. Your written complaint to the insurer and the insurer's final response.
7. Supporting evidence: quotes, assessor reports, photographs, bank statements showing premiums were paid, repair invoices.
8. What outcome you want, stated in one or two lines.

Number your annexures. A file the case handler can follow is a file that moves.

A worked example

Pieter's geyser bursts and floods the ceiling and two bedrooms. His insurer pays for the geyser but rejects the resulting damage, saying the geyser had been leaking for some time and the damage was gradual deterioration, which the policy excludes.

The figures are illustrative only. Pieter's repair quote for the ceilings, flooring and painting is R64 000. He writes to the insurer's disputes department, attaches the plumber's report stating that the geyser failed suddenly, photographs taken on the day, and the quote, and asks for a final decision. The insurer confirms the rejection. Pieter lodges with the National Financial Ombud Scheme the same week, with eight numbered annexures and a one line request: pay the resulting damage in terms of the policy.

The case handler puts the complaint to the insurer, which files its assessor's report. Pieter is asked to comment. The dispute comes down to whether the evidence shows a sudden event or a slow leak. Whether Pieter gets the full R64 000, a part of it or nothing depends on that evidence and the ombud's view of what is fair. What the example shows is the method: internal step first, then the ombud, then a tidy file that lets the case handler see the point in minutes.

What happens after you lodge

The scheme acknowledges the complaint, checks it falls within its mandate, and then puts it to the insurer for a response. There is usually an exchange of submissions. The case handler may ask you for more documents, and the process is largely on paper rather than in hearings.

Timelines vary with complexity. A straightforward motor claim can be resolved in a few months. A disputed fire claim with assessor reports on both sides takes longer. Many complaints are resolved by the insurer reconsidering once the ombud engages, which is a real outcome even though it does not feel like a ruling.

If the matter is not settled, the ombud makes a determination. It is not obliged to decide the way a court would. It considers what is fair in the circumstances, which is often an advantage to a consumer, and its determinations bind the insurer in the way the scheme's rules provide.

Realistic timeline

• Rejection to internal dispute: send your dispute within days. Most policies give around 90 days, but that is a limit, not a target.
• Insurer's final decision: typically a few weeks.
• Lodging with the ombud: the same week you receive the final decision.
• Acknowledgement and mandate check: usually quick.
• Exchange of submissions: a few weeks to a few months, depending on how quickly the insurer responds and whether further documents are needed.
• Outcome: a simple matter may resolve within a few months of lodging. A large or technical claim can take considerably longer.

What to do this week

1. Find the insurer's final written decision. If you only have a phone call, ask for the decision in writing today.
2. Diarise the period in your policy for issuing summons. It is commonly six months from the rejection.
3. Put your evidence into a single folder, numbered, in date order.
4. Write a one page summary: what happened, what the insurer said, why it is wrong, what you want.
5. Lodge with the ombud. Do not wait for the insurer to change its mind.

Common mistakes and what they cost

• Lodging before finishing the internal process. The complaint is referred back and you lose weeks.
• Sending a long narrative and no documents. The case handler cannot assess a story. They can assess an assessor's report.
• Complaining about the broker's advice to the wrong ombud. That is a FAIS Ombud matter, and time is lost in the transfer.
• Assuming the ombud complaint stops the summons clock. It may not. If the six months is running out, get advice.
• Repairing before the insurer's assessor has inspected. You lose the physical evidence of the cause.

Watch the six month clock in your policy

This is the trap. Most short-term policies say you have to issue summons within a limited period after the rejection, commonly six months. That contractual time bar is much shorter than the ordinary three year period under the Prescription Act 68 of 1969.

Do not assume that lodging with the ombud freezes that clock. If your six months is running out while the complaint is being considered, speak to an attorney about protecting your right to sue. It is far cheaper to check than to find out afterwards that you are out of time.

Your rights and the insurer's rights

You have the right to: a written final decision with reasons; a free complaint to the ombud without an attorney; to see the insurer's response to your complaint and to reply to it; and to a determination that considers fairness, not only the strict wording.

The insurer has the right to: have the internal process completed first; put its own evidence and assessor's report before the ombud; rely on a valid exclusion or condition that was properly disclosed; and decline to participate in a complaint that falls outside the scheme's mandate or monetary limit.

Other free routes

• The Financial Sector Conduct Authority deals with regulatory misconduct by financial institutions, though it does not resolve individual claim disputes.
• The National Consumer Commission, for consumer complaints that fall under the Consumer Protection Act 68 of 2008 rather than a financial services complaint.
• Legal Aid South Africa on 0800 110 110, subject to a means test.

The insurers fund the ombud scheme, so it costs you nothing to use. For most policyholders it is the right first step, and it should be tried before anyone starts talking about court. Where a claim is large enough to justify an attorney, ask whether the firm charges hourly or will consider a contingency arrangement under the Contingency Fees Act 66 of 1997, and get the answer in writing.