Sue’s vehicle air conditioning malfunctioned, and her insurance company repudiated her extended warranty claim because the service intervals/ maintenance of the vehicle were breached.

OUR FINDINGS

Although there was a breach in the service/maintenance of the vehicle, it occurred only once due to the Movement Control Order (MCO), which prevented the vehicle owner from servicing the vehicle at the nearest service centre in the neighbouring state.

The pandemic was an unprecedented event that caused the vehicle owner to breach the vehicle’s service. In this respect, the insured did not deliberately fail to service the vehicle on time. Bank Negara Malaysia’s Guidelines on Claims Settlement Practices state that an insurer should not repudiate a claim based on technical breaches that are not material or unconnected to the loss unless the breach has prejudiced the insurer’s interest.

We also find no evidence linking the breach and the cause of the air conditioning malfunction. There must be a causal link between the breach and the loss.

OUTCOME

The case manager issued a recommendation in favour of Sue. However, the insurer rejected and referred the case for Adjudication. The Ombudsman assessed the dispute and concurred with the case manager’s recommendation, ultimately deciding in Sue’s favour.