Programme: Diploma in Financial Planning 1.10. Larry's claim for damages to his vehicle, after a hailstorm, which took place on the 10 in of April, was rejected by his Insurer. The grounds hereof was as a result of Larry failing to make payment of his premium for April. Larry's premium is debited on the 26 th of the month ( 26 March in this case). However, the premium was returned as "unpaid". The Insurer then submitted another debit order on the 11 th of April ( 15 days after the agreed debit order date). Once again, the debit order was returned "unpaid". Choose the correct statement. A. Andrew's policy lapsed the moment the first debit order was not successful. B. The fact that Andrew has never missed a premium before will count in his favour when submitting a complaint to the Ombudsman for Short-term Insurance. C. The Insurer is entitled to reject the claim based on the missed premiums. D. The Insurer is acting contrary to law, as at least 30 days have to be given to Andrew to pay the missed premium. E. None of the above

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To analyze the situation regarding Larry's claim for damages to his vehicle, we need to consider the implications of the missed premium payments and the insurer's actions. Let's break down the statements one by one:

1. **Statement A**: "Andrew's policy lapsed the moment the first debit order was not successful."
   - This statement is likely incorrect. Generally, a policy does not lapse immediately upon a missed payment; insurers often provide a grace period or attempt to collect the premium again.

2. **Statement B**: "The fact that Andrew has never missed a premium before will count in his favour when submitting a complaint to the Ombudsman for Short-term Insurance."
   - While a history of timely payments may be considered positively, it does not guarantee that the insurer will accept the claim. The insurer's policy terms regarding missed payments are crucial.

3. **Statement C**: "The Insurer is entitled to reject the claim based on the missed premiums."
   - This statement is likely correct. If the premiums were not paid, the insurer typically has the right to reject claims, as coverage may not be in effect.

4. **Statement D**: "The Insurer is acting contrary to law, as at least 30 days have to be given to Andrew to pay the missed premium."
   - This statement may not be accurate. The specific laws regarding grace periods for premium payments can vary by jurisdiction and the terms of the insurance policy. However, many policies do not require a 30-day notice for missed payments.

5. **Statement E**: "None of the above."
   - This would be correct only if all previous statements are false.

Based on the analysis, the most accurate statement is:

**C. The Insurer is entitled to reject the claim based on the missed premiums.**

This is because the missed premium payments typically result in a lack of coverage, allowing the insurer to deny the claim.
The correct statement is: **C. The Insurer is entitled to reject the claim based on the missed premiums.**

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