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Santam’s full and final settlement offer, to pay out three months of business interruption insurance when policyholders are covered for longer periods, is unconscionable, says specialist public loss adjuster, Insurance Claims Africa (ICA).
According to ICA, it is not surprised, but disappointed by Santam’s decision to limit its full and final settlement offers to three months, while there is an appeal pending at the SCA regarding the indemnity period, which is the period of time policy holders can claim for.
However, a spokesperson for the insurer said it is Santam’s view that the indemnity period for the contingent business interruption policy extension, which includes infectious diseases, is limited to three months, while the court found it to be 18 months in the particular case of the Ma-Afrika judgement.”
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ICA anticipates that insurers will be very aggressive on how much to pay out, in an attempt to limit what they owe claimants.
“After almost seven months of legal wrangling, constant delays and Santam’s dogged refusal to pay its customers’ business interruption claims, Santam has conceded it is liable and that it will commence the process of assessing claims.
“However, Santam has said it will offer its Hospitality & Leisure customers a full and final settlement of only three months of losses, despite many policyholders having indemnity periods of six, 12 and 18 months in their contracts with the insurer,” Ryan Woolley, CEO of ICA says.
“The problem for Santam is that they have a judgment against them in the Ma-Afrika matter, which orders the insurer to pay for the full indemnity period of 18 months. This should not be ignored. The only way for them to treat their customers fairly is to offer an interim payment of three months and leave the balance to be dealt with after the SCA appeal.”
Woolley said by offering three months in full and final settlement, and forcing their customers to sue them for the balance, is grossly unfair and unconscionable. He believes that these actions suggest that Santam no longer seeks legal certainty, but that Santam is in fact trying to take advantage of vulnerable clients who are desperate for funding.
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“While we are encouraged by Santam’s acknowledgement that legal certainty has been established, they continue to pick and choose what suits them in the court rulings. Santam’s Stalingrad strategy of delay, deny and defend has put its customers under excruciating financial stress.
“The real tragedy is that if these businesses are forced to shut down as a result of Santam’s non-payment, their claim against the insurer is extinguished. Offering a full and final three month settlement on a valid 18 month contract is unacceptable.”
Woolley said shareholders should question who has given this strategy to Santam, as it demonstrates a lack of respect for their customers, the South African judiciary and the FSCA, as well as displaying a level of arrogance that, no matter how poorly you treat your customers, they will remain loyal.
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“This latest cynical and devastating move proves how disingenuous Santam is. Policyholders, who are already financially decimated, will now have to find the money to fight the insurer in court to enforce the indemnity periods contained in their contracts,” says Woolley.
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