Background

1.) The Complainant had a short-term insurance policy facilitated by the Respondent that became effective from 1 December 2023, covering household contents, cell phones, and a vehicle.

2.) The Complainant subsequently lodged claims on 11 August and 13 August 2024 regarding the loss of covered items, but had his motor vehicle claim rejected due to the lack of a tracking device.

3.) The tracking device was a requirement of the policy that the Complainant states had not been communicated to him.

4.) The Respondent admitted its failure to inform the Complainant about the tracking device requirement, calling it an administrative error during the December 2023 holiday period.

5.) While acknowledging the lapse, the Respondent argued that the Complainant also had a responsibility to review the provided documents, and it also raised concerns about the insurer’s role in failing to inform either it or the Complainant of the tracking device requirement.

6.) The Respondent suggested that liability for the financial loss should be shared among all parties: the Complainant itself and the insurer.

Assessment of Evidence

7.) The policy schedule, issued on 1 December 2023, stipulated that a tracking device must be installed within seven days of the policy’s effective date; otherwise, the claim will be forfeited. Furthermore, the policy requires a backup unit, as the vehicle, a 2017 Toyota Land Cruiser, was identified as high-risk.

8.) The requirement for a tracking device and backup unit was therefore a material requirement of the policy, which the Respondent should have reasonably informed the Complainant about.

9.) In this regard, the Ombud referenced the following sections of the General Code of Conduct for Authorised Financial Services Providers and Representatives (“the Code”).

10.) Section 3(1)(a)(iv) of the Code states that a financial service provider must, when providing information to the client, provide the information timeously to afford the client reasonably sufficient time to make an informed decision about the proposed transaction.

11.) Section 2 of the Code states that a provider must at all times render financial services honestly, fairly, with due skill, care, and diligence, and in the interests of clients and the integrity of the financial services industry.

12.) Section 7(1)(a)1 of the Code” places a duty on Financial Services Providers to disclose any material terms of the contract.

13.) The Code, therefore, places an obligation on the Financial Services Provider to put the client in a position to make an informed decision and take the necessary action. This can only be done if the Complainant has the required information beforehand.

14.) The aforementioned sections are therefore further enforced by section 7 (1) (c) (vii) of the Code, which states that a provider must provide full and appropriate information of the following: “concise details of any special terms or conditions, exclusions of liability, waiting periods, loadings, penalties, excesses, restrictions or circumstances in which benefits will not be provided.”

15.) No Record of Advice was provided, demonstrating that the Respondent had informed the Complainant about this requirement, nor any evidence of the Respondent following up with the Complainant to confirm whether a tracking device was installed

16.) The Ombud assessed that a reasonable individual would not anticipate a tracking device requirement unless expressly informed, suggesting the Respondent had a duty to thoroughly advise the Complaint and to monitor compliance with this requirement.

17.) The Respondent is the expert in the field and is expected to provide all the information and assistance necessary to ensure that the Complainant is well advised and informed regarding a particular condition, such as installing a tracking device. It will then be reasonably expected that regular follow-ups will be made to verify whether the device has been installed and to provide proof of installation to the insurer within 7 days, as per the policy conditions.

18.) This Office was, therefore, of the view that the Respondent’s conduct was negligent and amounted to a breach of the FAIS Act and the Code. Such conduct resulted in the repudiation of the Complainant’s claim and subsequent loss occasioned by the theft of the insured vehicle.

Outcome

19.) On 22 August 2025, the Ombud proposed a settlement, recommending that the Respondent compensate the Complainant for the rejected claim.

20.) The Respondent accepted this recommendation on 27 October 2025, agreeing to pay R812,000 in full and final settlement.

21.) The Complainant accepted this offer.