Owner takes legal action against Discovery Insure over theft reimbursement dispute
A car owner is taking legal action after insurance company, Discovery refused to pay her for her car which was stolen, as the insurer claims the tracking device did not work.
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A car owner has initiated legal proceedings against Discovery Insure after the insurer refused to reimburse her for the theft of her vehicle. This contentious situation has arisen from allegations that a faulty tracker device led to a breach of their agreement
Nicole Hoolsema (plaintiff) turned to the Gauteng High Court, Pretoria, for an order compelling Discovery to pay her for her loss.
In January 2021, Hoolsema entered into an insurance agreement with Discovery. The insurance policy, tailored to offer robust coverage for vehicles, includes essential provisions safeguarding against major perils such as theft, hijacking, and damage.
Discovery Insure has clarified that its obligation to indemnify policyholders hinges entirely on the proper installation and operational status of its Crowd Search motor vehicle tracking device. This stipulation outlines a critical aspect of the agreement between Discovery Insure and its clients: failure to comply with device requirements may lead to the nullification of coverage.
In November 2023, the plaintiff lodged a claim for her stolen vehicle.
The claim was rejected by Discovery on the basis that the tracking device was allegedly not working. Hoolsema said she had complied with the conditions set out by Discovery when she signed the agreement, and that she had paid her monthly premiums, and she had fit the required tracking devices in her vehicle. She said the two units were installed in accordance with the specifications as requested by Discovery.
The latter repudiated the claim because the Crowd Search Device is faulty and would not provide sufficient cover. The repudiation was based on an alleged e-mail sent to the plaintiff informing her that the Crowd Search Device was faulty prior to the theft.
The plaintiff, in her original summons against the insurer, claimed she never received such an email and maintained that the device was installed and in working order. She subsequently indicated that she wanted to amend her summons, to add that she always understood the device to be in good working condition.
Discovery objected to this amendment, arguing that it failed to plead that the device was in fact in full working order at all times, as stipulated in the policy. In countering this objection, Hoolsema argued that there is no requirement in law for her to plead that the device must be in full working order at all times as Discovery insists.
She pointed out that her cause of action remains unaltered by the proposed amendment and is exactly the same cause of action that was pleaded in the original particulars of claim. She argued that the amendment will not cause any prejudice to Discovery and that the latter will still have the opportunity to argue its case later in the main application.
Discovery, on the other hand, said it needed to be proven by the plaintiff that the device was in full working order at all times and not simply that she “understood the tracking device was in good working condition”.
Judge Noluntu Bam said the litigation is still at an early stage, with Discovery still having to file its plea in countering the claim against it. She found the amendment clarified Hoolsema’s position and will contribute to a better resolution of the dispute.
The judge subsequently allowed her to amend her plea.