Amendments to the Policyholders Protection Rules now require insurers to take a decision on claims within a “reasonable time” and communicate this within 10 days.
This means short term insurance policyholders now enjoy extra protection under the law. In the past, policyholders suffered the indignity of having to wait for days on end before a decision on their claims was made.
According to the new rules, the rejection letter must inform a policyholder of his or her right to lodge complaints with either the Ombudsman or the Ombudsman for the financial services. It must spell out all avenues open to policyholders if they are not satisfied with the manner in which their claims have been handled.
The rules were amended to ensure a balanced and fair approach to decision-making and time limitations relating to claims under policies.
The amendments apply only to personal lines policies where policyholders are insuring their personal property. Another change was that policyholders now benefited from extended periods in which to make representations and institute legal action should claims be rejected.
The time limit stated in these policies for instituting legal action had now been extended by a further 90 days.
“In the past, if a policyholder wished to institute legal action in the event of a claim being rejected, he or she had to do so within 180 days of receipt of the rejection letter. Another important change is that insurers response’s to representations must contain reasons for the decision and must include appropriate facts.”