South African insurers have the right to reject a claim if the policyholder is found to have been driving under the influence of alcohol, but they must substantiate their decision with solid evidence.
In the 2023 annual report from the Ombudsman for Short-Term Insurance (OSTI), Assistant Ombudsman Zanele Makamba reviewed a case where an insured individual filed a claim after his vehicle was damaged in an accident. The insurer denied the claim, alleging that the driver was intoxicated at the time of the incident.
The driver admitted to having consumed four beers between 09:00 and 15:00 at a party, but the accident occurred at 19:48—almost five hours later—after he swerved to avoid a pedestrian, went off the road, and crashed into a tree.
The insurer’s investigation corroborated the sequence of events, but the driver maintained that he was sober and that the alcohol had no effect on his driving ability.
Alcohol is primarily metabolized by the liver at a rate of about one standard drink per hour, though this can vary based on factors such as age, weight, gender, and food intake. While alcohol can remain detectable in the body for 6 to 72 hours, its half-life is approximately 4 to 5 hours.
Men with low or no alcohol tolerance typically begin to exhibit signs of intoxication when their blood alcohol content (BAC) reaches 0.05%, with significant impairment to their driving ability at 0.07%.
The insurer, standing by its rejection of the claim, brought the matter to the OSTI. The key issue was whether the insured, based on the balance of probabilities, was under the influence of alcohol at the time of the accident, with the burden of proof resting on the insurer.
To meet this burden, the insurer needed to demonstrate that the complainant had indeed consumed alcohol on the day in question and that this consumption had impaired his driving.
It was undisputed that the insured had consumed around four to five beers on the day of the accident. However, while the insurer argued that circumstantial evidence should be considered, it failed to present any such evidence to support the claim that the insured was impaired by alcohol at the time of the incident.
There were no eyewitnesses to provide testimony on the insured’s behavior, nor any specific evidence indicating that alcohol influenced his driving.
The insurer relied on general facts about alcohol consumption, which did not accurately reflect the insured’s condition at the time of the accident. The statements regarding alcohol’s effects were speculative, and no concrete evidence was provided to confirm that the insured was indeed under the influence.
“The insurer could only establish that the insured had consumed alcohol, but failed to prove that this consumption influenced his driving or was material to the accident,” Makamba stated.
As a result, the insurer could not prove its case on a balance of probabilities, leading the OSTI to recommend that the insurer approve and settle the claim. The insurer accepted the recommendation and paid the claim in full.
