Delay in notifying the Insurer: Stolen Vehicle reported after 4 weeks
Background
The Participant’s claim for theft of his vehicle was repudiated by the Takaful Operator on the ground of late notification of more than 4 weeks in breach of condition 2 (a) of the Private Car Certificate.
Investigation and Findings
Condition 2(a) of the Private Car Certificate states as follows:
“We must be notified in writing or by phone in either case with particulars of the vehicles involved, date of accident and, if possible, a brief description of the circumstances of the accident within the specific time frame as follows after an event which may become the subject of a claim under the Certificate:
- Within seven (7) days if you are not physically disabled or hospitalised following the event.
- Within thirty (30) days or as soon as practicable if you are physically disabled and hospitalised as a result of the event.
- Other than i) and ii), a longer notification period may be allowed subject to specific proof by you”
Investigation by the loss adjusters revealed that the theft of the vehicle was genuine and no foul play was suspected on the part of the Participant. They were satisfied that reasonable precaution had been taken on the safety of the vehicle and ruled out negligence on the part of the Participant. The delay in notification was because the Participant had waited/hoped for the vehicle to be recovered by the police before notifying the Takaful Operator. This was Participant’s first experience of a theft claim.
Settlement
The Takaful Operator was informed by OFS that under clause 3.4.2 (b) of the Guidelines on Claims Settlement Practices issued by Bank Negara Malaysia, a Takaful Operator should not repudiate a claim on technical breaches of warranty or certificate conditions which are immaterial or unconnected to the circumstances of loss unless it has prejudiced the interest of the Takaful Operator. The Takaful Operator was advised that late notification of event was unconnected to a case of vehicle theft. It was a technical breach and unless the Takaful Operator could show that its interest was prejudiced, it should not repudiate a claim.
The Takaful Operator agreed to settle the claim which was accepted by the Participant.