In January 18, 2025, the Complainant’s insured vehicle, a 2013 Toyota Hilux, was stolen and declared a write-off. The insurer paid R255,629.80 based on a Limit of Indemnity of R269,084.00, which the Complainant later discovered was significantly less than the actual Retail Value plus specific extras.

The Complainant believed he was insured for Retail Value and was unaware of the implications of the Limit of Indemnity, which had been carried over from a previous policy without reassessment by the Respondent. The issue was whether the Respondent failed to ensure the insured value was accurate and adequately disclosed.

Under the FAIS Act, specifically Section 2 of the General Code of Conduct, financial services providers must act honestly, reasonably, with due skill, care, and diligence, and in clients’ best interests. Section 8 also requires advice suitable to the client’s financial needs and circumstances, fully disclosing material terms.

The Respondent did not reassess or clarify the Limit of Indemnity at policy start or renewal, leading to a shortfall of R44,270.00. After intervention by the FAIS Ombud, the Respondent initially offered a settlement of R20,000.00, which the Complainant rejected.

Upon reconsideration, the Respondent offered a final settlement of R30,000.00, which the Complainant accepted.