Tshamunwe Masindi suffered not much under R1 million worth of storm damage to a Pretoria home. Discovery Insure covered that.
That represented good value on a policy on which Masindi had only been paying premiums for six months, covering both repairs and R675 000 worth of emergency accommodation while the damage was sorted out. Then Discovery discovered the emergency accommodation claim had been tainted by whatThat fraud will now cost Masindi in the region of R1.7 million in money he would have been legitimately able to keep, not counting Discovery's legal costs.
Discovery had gone to the high court to claim back all its money, based on a standard clause in many insurance contracts: if there is any fraud, the whole policy is cancelled, retroactively. The high court found there had been fraud in the claim, but said that the fraud provision amounted to a penalty clause that is unenforceable under South African law, and so the genuine part of the payout should stand.