Understanding Claims

The purpose of insurance is to seek to put the insured in the same financial position he was in prior to the accident/loss.  The insured should not profit from having suffered a loss. 

The claimant MUST prove insurable interest in the property which becomes the subject of the claim and also substantiate his loss. 

The insured is indemnified based on the percentage he insures in relation to the value of the risk.  That is to say, if the value of the risk is $1M and the sum insured is $500K (or 50% or the value of the risk) and a loss occurs the indemnity would be to the extent of 50% of the amount claimed.  It is therefore recommended that all sums insured be adequate to avoid the application of the Average Clause in the policy. 

In the case of motor vehicles, in the event of a total loss the amount payable is determined by the market value of the vehicle or the sum insured, whichever is less.    

What to do after an accident/loss 

Notify the broker/insurance company as soon as possible after the incident but no later than thirty (30) days thereafter. 

Make a report to the Police immediately where circumstances necessitate same. 

Furnish full details of the claim on the prescribed form within Thirty (30) days and fulfill the necessary requirements as stated in the policy document. 

IN THE CASE OF A MOTOR VEHICLE ACCIDENT NO ADMISSION OF LIABILITY, OFFER OR PROMISE OF PAYMENT SHOULD BE MADE EITHER BY THE INSURED OR BY ANY PERSON ON HIS BEHALF WITHOUT THE WRITTEN CONSENT OF THE INSURANCE COMPANY. 

Claims Settlement Procedures 

Generally a claim is settled within 30 days.  An independent loss adjuster is appointed to assess the nature and extent of the damage or to investigate the circumstances where necessary and make recommendations for the basis of settlement.  

Almost every claim attracts a Policy Excess/Deductible whereby the insured bears a portion of the loss.  In the case of motor vehicles the Excess is a percentage of the sum insured.  As regards property insurance, the Excess is generally a percentage of the claim except in the case of a catastrophe claim where the excess applicable is 2% of the sum insured per item. 

Motor vehicles covered under a comprehensive policy enjoy benefits such as windscreen replacement, recovery and towing of the damaged vehicle and in some cases compensation for loss/damage of personal effects and emergency medical treatment.