When a car insurance claim, made under a valid policy, is rejected by a car insurance company the term used is repudiation. In terms of South African legislation, which governs the way insurance companies operate, the insurer must advise the insured party in writing of its decision to repudiate the claim. The insurance company must also advise the reason for its decision not be pay out against the claim. There are three main reasons why a car insurance claim can be repudiated:

A condition or term of the policy not complied with by the insured person: There are many conditions and terms applicable to a car insurance policy and if the insured party is found to be in breach of any condition the insurance company has the right to repudiate the claim. An example will be where the insured did not report a claim within the laid down time limit.

A material fact was withheld from the insurer: Any fact that could have had an influence on the insurer’s decision to insure or not insure the car must be declared by the insured person, for example, if a car had prior accident damage. Not doing so provides sufficient ground for the insurance company to repudiate the claim.

A fraudulent claim: In this case the insurance company must be able to prove that fraud has taken place; suspicion alone is not sufficient grounds for repudiation.