Man ordered to pay R1.5 million to Discovery over fraudulent claim

Pretoria man has been ordered by the Supreme Court of Appeal to pay over R1.5 million and interest of 10.25% to Discovery Insure.

The court found that Discovery did not have to honour the claim by Tshamunwe Masindi because part of the claim was fraudulent.

SPECIFIED POLICY

Masindi took out the policy for specified insured risks, for his household contents, against certain risks resulting in total loss or damage howsoever caused.

The policy provided, amongst other things, that if the risks insured against eventuated, resulting in damage to his residence, rendering it unsuitable for human habitation, the insurer would be obliged to compensate him for the resultant damage to the buildings and household contents, and, where applicable, to reimburse him for his out of pocket expenses incurred for what the policy described as emergency accommodation.

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POLICY CLAIM

“The respondent submitted a single claim under the building section of the policy for losses caused by storm damage to his residence. The claim was made up of two components. The first represented costs of repairs to the respondent’s residence and damage to household contents. The second was for emergency accommodation. Consequently, at various times between 7 December 2016 and 25 May 2017, Discovery paid to the respondent the aggregate amount of R1 594 980.12 in settlement of both components of the claim,” reads the judgement.

INVESTIGATION INTO THE CLAIM

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Discovery launched an investigation into the claim and found that the claim was partially fraudulent.

The insurer notified Masindi to repay the full amount that it payed him.

Discovery further canceled the policy.

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INSURER TAKES THE CLAIMANT TO COURT

However, Masindi failed to pay the money back resulting into the insurer instituting legal action against him.

Masindi was ordered to pay back Dicovery insurer R1 594 980.12 plus interest of 10.25% per annum calculated from 8 June 2017 to date of final payment.

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