HOW TO PREVENT REJECTION OF INSURANCE CLAIMS.
MISTAKES TO AVOID.
- Policy document
After you pay the premium make sure you demand for the policy document. The Insurance Act states that the policy document must be delivered to the insured not later than 60 days after payment of the first premium. When you get the policy make sure you read and understand the policy document or get a professional adviser (legal practitioner or insurance broker) to read and interpret the policy for you. Note that the insurance company is the insurer and the policy holder is the insured.
- Breach of warranties & conditions
At the proposal stage, answer all questions and provide all information required by the insurer. Do not breach warranties and conditions during the period of the policy because it will allow the insurer to avoid claims payment. The Insurance Act allows the insurer to reject the claim where the breach of warranty or condition amounts to fraud or a fundamental warranty and condition has been breached. A warranty or condition is something that you must do or anything that you must not do.
- What to do in event of an accident or loss
In the event of an accident, do not admit liability or settle or compromise with the other person at the scene of the accident. Report the accident or loss immediately or promptly because delay to report the accident or loss may cause the insurer to reject the claim. Make sure you submit all relevant documents requested by the insurer to support the claim.
- What the insurance company must do
Where the insurer accepts liability they must settle the claim not later than 90 days after issuing the discharge voucher but where the insurer does not accept liability they must deliver a statement in writing stating the reason for rejecting liability not later than 90 days from the date the claim was submitted.
- Understanding claims payments
5.1 Non-Life insurance policies include a pro rata condition of average. This is a condition which provides that if the sum insured is lower than the actual or market value of the property on the date of the loss, the amount of the claim will be reduced pro rata the under insurance.
5.2 Some of the grounds upon which an insurance claim can be rejected include; (i) where premium had not been fully paid on the policy; (ii) where there was breach of a warranty or condition of the policy; (iii) where the insured failed to disclose material facts when taking the policy; (iv) where the claim was false or fabricated or where the amount of the claim was grossly exaggerated.
- Remedies if the insurer refuses to pay the claim
The insurer has 90 days to settle the claim or give reasons in writing for rejecting the claim. If the insurance company rejects the claim, the insured can do any of the following things; (i) get a legal practitioner or insurance broker to pursue the claim for you; (ii) write a letter to the insurance company to demand payment of the claim; (iii) make a complaint to the National Insurance Commission (NAICOM) against the insurer; (iv) file a case against the insurer in court to enforce your claim.
Jide Bodede
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