Insurance practice cannot go against public policy! All insurance contracts will state this in one way or the other. Simply put, this means that as a legal contract, an insurance policy is exempted from indemnifying an insured where illegal activities have been involved. This follows the common law doctrine of Exturpi causa Ex turpi causa non oritur actio (Latin “from a dishonourable cause an action does not arise”). The doctrine states that a plaintiff will be unable to pursue legal relief and damages if it arises in connection with their own tortious act.
As an example, If Adam is a passenger in a stolen car which he knows is stolen and still freely participates in it then, if this car crashes and he gets injured, he cannot get damages from the driver of the car because Adam was also involved in the criminal act and therefore no action can arise here by the operation of ex turpi causa non oritur actio.
We notice here that not all risks automatically become uninsurable. One may take out insurance against them without fully disclosing the required information to the insurer but at claims stage the insurer reserves the right to decline indemnification. For example, an insurer can offer cover for a retailer’s stock but if it is later concluded that the retailer was stealing the stock elsewhere for resell at his shop, an insurer can reject your claim for the stock after it is destroyed in a fire.
The tricky thing about public policy is that it is susceptible to alterations and modifications. A practice can be legal today and illegal tomorrow, vice versa, as we saw with the use of cannabis.
So, what if one day we wake up and it has become against public policy to drive at certain times except under strict expressly specified circumstances?
The government of the Republic of South Africa has for almost a year had a nationwide curfew in place with alterations from time to time in an effort to curb the spread of the dreaded coronavirus. The question amongst many has been, “will an insurer pay out especially a motor vehicle loss which occurred after curfew time whilst away from the insured’s residence without meeting the necessary requirements to be on the road at that juncture?”
The response to this question by many insurers has been, “Claims arising from incidents happening between hours deemed in curfew will not automatically be rejected. Each claim’s circumstances will be reviewed on its merits.” This has been met by mixed reactions from the clients with some saying they should not be penalized for their “negligence”. It is important to note that insurance is meant to cover normal negligence (not gross negligence). However, this is not negligence, currently, driving outside curfew hours without meeting the necessary requirements to do so is a criminal offence. It is the same as driving at 200km/hr in an 80km/hr zone.
It is our recommendation that all those with insurance avoid driving outside curfew hours without meeting the necessary requirements as insurers may decline their claims. A special emphasis on “may”. Though the insurance policies might not expressly mention this act as an exclusion they still reserve the right to reject cover based on illegality.
My question to you is, “if they may reject your claim, why risk it?”. If there is no pressing reason for us to be out let us avoid it. Not only are we being law abiding citizens, but we are actively being involved in the fight against this coronavirus. More importantly, we are protecting ourselves and our loved ones.
For the specific current curfew and other lockdown rules you may visit the government website at https://www.gov.za/
For a quote please contact Ayoba Insurance Brokers on +27 11 395 1631 or email email@example.com
Alternatively, you can follow the link https://ayobainsurance.co.za/
The information and content contained herein do not constitute a recommendation or solicitation to purchase or sell any financial product or service or arrive at a financial decision, nor do the contents of this publication constitute any form of advice or guidance.