The financial regulatory authority has directed Botswana Insurance Company (BIC) to honor a claim where a policyholder sought replacement for a vehicle damaged in an accident.

The dispute involves BIC and an unidentified policyholder who appealed a rejected insurance claim with the Non-Bank Financial Regulatory Authority (NBFIRA) Tribunal.

This follows the policyholder filing an insurance claim for repairing or replacing his accident-damaged vehicle. BIC rejected the claim citing the policyholder's failure to comply with a contractual term requiring submission to a breathalyzer test by a police officer for alcohol analysis.

The policyholder, backed by NBFIRA and its tribunal, argued against the rejection, asserting that BIC's exclusion clauses in the motor vehicle policy were unclear.

The tribunal ruled in favor of the policyholder, emphasizing that during the insurance period, the insured vehicle was involved in an accident. Under the policy terms with BIC, the policyholder submitted a claim for repairing or replacing the damaged vehicle. BIC declined the claim, citing the policyholder's breach of a clause stating coverage would be void if the policyholder operated the vehicle under the influence of alcohol without providing a breath specimen.

The policyholder defended by noting acquittal from Gaborone Extension II Magistrate Court on charges of failing to provide a breath specimen, arguing the insurer had no grounds for its stance.

BIC countered that the court's decision did not affect the contractual breach outlined in the policy. They contended exclusion clauses specify risks not covered, including instances where the policyholder fails to provide a breath specimen.

BIC also disputed NBFIRA's reliance on the magistrate court ruling, arguing it was misapplied. However, the tribunal upheld NBFIRA's decision, interpreting the exclusion clause strictly.

The tribunal concluded that every word of the contract must carry meaning, ensuring policyholders understand exclusions and restrictions at the time of policy placement and claim submission. It emphasized that compliance with police requests for a breath specimen, even if the result is inconclusive, does not justify claim denial under the clause.

In summary, the tribunal supported NBFIRA and the policyholder, maintaining that exclusion clauses must adhere to their plain meaning without stretching interpretation beyond what is stated.