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Time barred policies

Consumer Council Of Fiji
Saturday, February 24, 2018

IN modern day, most people have become accustomed to creating a hedge fund for unforeseen circumstances.

Making regular contributions to a particular insurance scheme ensures events like death or injury are covered for.

For most, the hedge fund is considered a blessing as it ensures money budgeted for day to day living isn't compromised when these unforeseen circumstances occur.

Sometimes some enter into agreements without fully understanding clauses specified.

These unspecified and uncertain clauses become a deterrent when claiming for funds from insurance providers.

The most common clause some insured fail to recognise or adhere to is the time frame within which they can lodge their claims.

For most insurance contractual agreements, a time frame is given to a customer to lodge or pursue a claim with the company. Any attempts after the time frame stipulated is considered time barred.

Time barred is basically a legal term referring to whether a lawsuit or an insurance claim was filed in time under a statute of limitations or Limitations Act.

If not, then the cause of action which the lawsuit or insurance claim is based could be dismissed.

The law, however recognises limits in timing during which litigation has to commence.

Otherwise the party having the right to pursue litigation or an insurance claim loses that opportunity.

Recently the council received a case whereby employee consumer was denied an insurance payout for his medical expenses because the time frame with which he was to provide documentation had elapsed.

In 2014, Philip, while on a tour to Australia, contracted an illness and was treated at a hospital there.

After his return, he lodged his insurance claim with his insurance provider submitting relevant medical reports with invoices worth $13,569.

His employer, however, delayed the transfer of the relevant documents to the insurance provider and as a result the provider declined Philip's claim on the basis that it was time barred.

After seeking advice from various stakeholders, Philip lodged his complaint with the council in 2017.

Through the council's intervention, the insurance company re-opened Philip's case and established that the delay was not because of Philip but his employer. Hence the insurance company paid Philip the full amount of his claim.

Consumers are reminded that individual contracts of insurance can specify a time limit for making claims. According to Section 26 (1) and (2) of the Insurance Law Reform Act 1996:

(1) A provision of a contract of insurance prescribing any manner in which or any limit of time within which notice of any claim by the insured under such contract must be given or prescribing any limit of time within which any suitor action by the insured must be brought shall:-

(2) (a) if that contract is embodied in a life policy and the claim, suit, or action relates to the death of the insured, not bind the insured; and

(b) in any other case, bind the insured only if in the opinion of the arbitrator or court determining the claim the insurer has in the particular circumstances been so prejudiced by the failure of the insured to comply with such provision that it would be inequitable if such provision were not to bind the insured.

Considering the above provisions, consumers must be mindful that the insurance providers are not obliged to pay out any claim in the event the said claims are lodged beyond the time limit provided in the insurance contracts.

Consumers are also advised that insurance companies are only liable to pay insured amounts as per the individual policies signed by them.

Anything in excess of what is in the agreement has to be paid by the consumer. This is as per Section 26 (2) Insurance Law Reform Act which stipulates.

(2) Where: (a) the insured under any contract of insurance to which subsection (1)(b) of this Section applies fails to give notice of any claim in any manner or within any limit of time prescribed by the contract; and (b) the cost of repairing, replacing, or reinstating any property when it falls to be met is greater than that which would have applied if the notice had been given in the manner or within the time so prescribed, that greater cost shall not constitute prejudice to the insurer for the purposes of subsection (1) (b) of this Section, but the insurer shall not be obliged to apply or pay in repairing, replacing, or reinstating the property a greater sum than that for which he or she would have been liable if the notice of claim had been given in the manner or within the time so prescribed.

Besides the above laws on limitations on time to institute legal proceedings, the Accident Compensation Act 2017, which requires vehicle owners and victims to lodge their claims within a time frame of three years from the date of the accident.

Any claims beyond three years will not be considered.

* This is a regular contribution from the Consumer Council of Fiji. Email: for feedback.

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