READ THE FINE PRINT
 The simplest task can expose one to huge liability, and nowhere more so than when it comes to motor cars. There are simply so many of them on the road that accidents are bound to happen.
Or thefts, or hijackings.
Sipho’s father had an accident and his car was in the garage for repairs for 7 days. Luckily for his father, his motor vehicle accident policy granted a benefit under such circumstances. He could have a replacement car of the same size for the 7 day period. At least he could get around and wouldn’t have to use public transport!
His insurance broker phoned to say that the replacement car was ready to be collected at the car hire company. It was all totally free, except for the insurance excess. Sipho’s father knew about the excess, since he had recently had to pay it for the accident he had been involved in. So Sipho was sent to collect the car, taking his father’s credit card along with him, as well as his driver’s license. On arrival he told the receptionist that he had come to collect the car for his father. She referred him to another lady who pointed to the replacement car outside and Sipho saw that it was actually much bigger than his father’s and became quite excited.
The lady asked him what his name and address was. She then asked for his license and a credit card, which he had ready, and she swiped it through a machine and asked him to sign a form. Sipho’s excitement grew as he peered through the window at what looked like a brand new car outside. “Yes, it is brand new,” said the lady, noticing his excitement, “We have just taken delivery of our new season’s hire cars this afternoon.”
So Sipho drove very carefully and proudly out of the car-hire premises, and delivered the replacement car to his very happy father. The next day, his father had to go to town, and set off early in the morning. Sipho was working on his Master’s thesis at home, so couldn’t go along. It was about mid-morning that he received a call from his father to say that the car had been stolen from a parking garage. Sipho immediately reported this to the car hire company.
After a few days, Sipho received a letter from the car hire company alleging that he had been negligent in allowing the car to be parked in an unsecured area, and that as a result, the insurance would not be paid. Instead, he would have to pay for the full value of the car. The letter went on to say that the credit card supplied had already been debited up to the full value of its limit, but that there was a large sum outstanding.
It turned out that the car hire company did not have external insurance on its vehicles, but self- insured them. It claimed that Sipho was the hirer, not his father. It claimed that his father had not taken possession of the hire car as the agreement between it and the Accident Insurance Company required. It claimed that Sipho’s father’s broker had not given it proper instructions.
It made some nasty threats. Sipho’s father went to see his lawyers. They said they could fix the problem but that this would cost about R16 000 in legal fees, some of which he might get back if he won his case. They said they would oppose the car hire company’s claim and also sue the broker for not arranging things in the correct manner. The case was set down for a court date.
Sounds far fetched? Maybe, but, with some minor changes, the above is an account of a real life incident, the outcome of which has not yet been resolved. The lesson Caveat subscriptor - - be careful what you sign. Oh, and you might like to protect yourself with a legal costs policy. These lawyers don’t come cheap.
Clive Hill | Financial Services Manager expensive
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