Every insured has a right to make claims when a risk occurs. But while some insured know how to do so, others don’t. This has led to many problems. Worse still, many insurance companies do not help matters. At a parley by Leadway Assurance, experts show the way to go, reports Omobola Tolu-Kusimo.
The ultimate goal of claims processing is to compensate a customer who has suffered a loss.
But most times, making claims can be the most difficult for many due to lack of understanding of insurance. Usually, at the time of underwriting, both the underwriter and customer appear smiling but when the time comes for claims payment, they don’t.
A Claims Officer, General Insurance Business at Leadway Assurance Plc, Steven Abdulahi, during a presentation on claims’ processing to reporters in Lagos, affirmed that some customers do not understand insurance matters. As a result, they end up having avoidable issues.
He said: “Basically, if you have a policy there are terms and conditions that guide the document. At the time of claims, we have an array of activities that we look at that take place in between when there is an occurrence and at the point when payments are made to the customer. This whole array of activities is what we describe as claims processing.
“For us, at Leadway, and generally among other companies in the insurance industry, we have our processes. Overall, we believe that when there is an occurrence, the policy holder has the obligation to notify us.
Technicalities of claims process
“First of all, when we receive notification from a customer, we register it in our books and allocate a reference number to the policyholder. This is typical for every company,” said Abdulahi.
He conrinued: “In cases where a customer has one claim in vehicle insurance, he or she will get one reference number and if he has two, he will get two reference numbers.These are the technical aspect of the operation. After we acknowledge the notification, we will then get back to the client to sympathise with him on his loss which would also elicit the next step that has do with inspections. In carrying out inspections, we go out to look at the loss to see how it happened, the extent of damage and have full knowledge of the circumstances that led to the loss. We can send our in-house representative for the inspection or in cases where the volume of the losses is high or requires more understanding, we call our external representatives who are licensed loss adjusters. We engage them as independent parties, so they go out to work with the customer as our representative. Their report guides and inform our decision and this form part of the claims process.
“Secondly, we do what we call claims adjustments. This has to do with when you have property damage or any type of loss. We estimate the proportion of loss involved to determine the actual value of the loss. We also estimate the extent of recovery, check if the customer has made some gain; are there areas or where customer suffered more loss? We do all of this to match the loss with the cover. As claims managers, our responsibility is to interpret the policy document to bring all terms and conditions to book. With the report of the loss adjusters, we take a decision and communicate our position to the customer or an intermediary. If the claim is admissible, then we make an offer and if the offer which is always accompanied by a discharge voucher to the customer is acceptable, he or she is required to sign and return it to us.
“But if there are instances where the circumstance of the law or the cause of the loss does not align with the terms and condition, then our obligation is not attached. In instances where our obligations are not attached, we softly sympathise with the client and tell him or her that we are constrained to proceed with the claim request. In other cases, we have instances where the customer does not know what the policy covers. So, it is very key that customer checks the terms of cover. Because it is at the time of loss that we used to have issues. When taking policies, everyone is smiling but our responsibility as claims officer is managing people that have losses and sometimes where they need to cover some terms and maybe they’re not properly guided, we guide them”.
He said there were cases where a customer had two cars and bought another, or a company with fleet of cars bought a new car and did not remember to insure it. ‘’We will have difficulty in processing payment on the uninsured vehicles,’’ he added.
How to make a claim
“For the channels of claims notification, we have various means in which you can notify the company. We are in a technological age and you don’t need to go to the company. You can do a letter a formal letter to us notifying us of the loss immediately after the loss occurs and this elicit our reaction where we will guide you on documents needed for us to proceed with the claim.
“You can also send us an email with the address stated on the policy. If you have a relationship with your relationship officer or agent, with just a simple SMS, we will start our claims process. You can also make phone calls to the officer, informing him of your loss. We have a website where you can easily interact with us through our mobile apps,” Abdulahi noted.
Right to claims
The Executive Director, Leadway Assurance, Ms. Adetola Adegbayi, decried the apathy by insured towards making claims when an insured risk occurs.
She stated that some people insure, but don’t know their right to demand for claims payment.
She stressed that instead of going to their insurers to make claims, they decided to bear the financial burden.
She advised Nigerians who have purchased insurance cover and premiums to approach their insurance firms, make their claims and insist on full settlements because they have the right to do so as stipulated by the law.
Realising that some people don’t demand for claims, she said some overambitious operators cashed on this loophole, to rate-cut policies to unreasonable price, with the assumption that the insured would not demand for compensation.
Because of the low rate they demand on their policies, she said, they, in most cases, outbid their competitors for businesses because their rates are lower and consumers always want to go for policies with lower rates.
In the event of claims, she said, these overzealous underwriters do default, since the premium charged is not the actual value of the products.
To this end, Adegbayi stressed that rate-cutting could be fought by Nigerians, if they began to request claims on their policies, stating that when this happens, underwriters would sit up and charge the normal rates that could sustain them when the time for claims arose.
Explaining that an insurance firm would be heavily sanctioned if it defaulted in claims obligations, she charged Nigerians to report defaulting underwriting firms to law enforcement agents, promising that steps would be taken to pay claims to the aggrieved insured.
