INDUSTRY OBSERVATION

The classic “engine over- rev”

Inevitably there will always be “grey areas” in insurance claims, particularly when an “unusual” claim results in dispute. One of these grey areas is the archetypal “engine over-rev” claim. We recently lost a court battle on this very issue. 

While we are quite happy to take the loss on the chin and write it down to experience, I feel it is the right time to debate the merits of the case. 

The basic facts are as follows. The insured’s driver was traveling down what is known as “Kloof Pass” between Marken and Makopane (check) (formerly Potgietersrus) in wet weather conditions when the truck suffered catastrophic engine failure. 

The resultant claim form declares the driver lost control of the vehicle and there was an over-rev. Suffice it to say there was no other damage to the vehicle. There were no collisions with any other object. In other words, it was not a road accident. 

The reason I reiterate this point is to pinpoint the area of debate which is that we have major engine damage but exclude any accidental cause.

The scenario facing the insurer is as follows:

• We have a claim for R100, 000 engine damage. This engine is described as having a piston sticking out of the block so this is a “total” not a “partial” repair. 

• We need to define the point that makes this a valid claim. 

• Would betterment be applicable to this kind of settlement if relevant? 

• Should insurance companies cover this kind of event? 

• What is the onus on the insured? (i.e. ensuring there is a sufficient level of professionalism and driving competency.)

My personal thoughts on this case are indicated below:

A professional driver is meant to negotiate obstacles and the road surface with care. Given this fact, it is a precondition that a truck driver should know that: 

• You should not drive a truck down a pass in the wrong gear;
• You should not proceed down a pass at the wrong speed;
• Professional drivers are trained to proceed at different speeds for differing conditions. 

Approaching any obstacle at the wrong momentum or in the wrong mindset is, to my mind, a variable degree of “negligence”. 

An example of this would be driving through traffic at 120kms/hour when all the other vehicles are travelling at 60kms/hour. 

Another example would be a truck that goes over really bad potholes in excess of a safe speed. There is no compensation for the poor conditions. 

My deductions are as follows: 

• We still believe this is “negligence.” I would have to conclude the driving was inappropriate for the conditions. 
• Whether betterment would apply? Well in terms of a debate it would be interesting to gather responses. We won’t commit on this one. 
• Given the fact that we lost the case, this is really a red letter day, it has huge repercussions for the commercial vehicle insurance industry. To this end I would love to see case law if anybody can refer me to any similar examples. 

I believe it would be very interesting to see other legal opinions. The reason why I say there are big repercussions is because a driver’s assumed competence is being compensated. 

In other words if there is no accident we are still potentially liable for driver induced negligence. 

Finally, where are the basic standards of driver professionalism going? The logical conclusion is that any event is now not the responsibility of the insured. I hope you understand the train of thought. 

If ever there was a case for commercial insurers to get commonality on approach, it is fair comment to say this must be one very pressing issue. 

We greatly look forward to alternative view points and opinions.