In 2022 the Insurance Regulatory Authority of Uganda reported that over 600 billion shillings was paid out in insurance claims in Uganda. This is a record high but there are still many claims that are not filed, filed wrongly or simply repudiated in error.
Eagle Africa Insurance Brokers offers its clientele complimentary claims handling service. In 2022 they successfully processed claims in excess of 30 billion. We spoke to Ms. Phiona Nalumansi, the Client Relationship Executive in charge of Claims about the general practice and procedures in insurance claims.
What is an Insurance Claim?
An Insurance Claim is a formal request by a policy holder to an insurance company for settlement or compensation benefit following the occurrence of an insured loss event.
What should a policy holder do if an insured loss occurs?
Immediately notify your insurance provider. The notification can be made orally, in writing and on any readable media. The insurance provider will need legal documentation, police records, and witness statements among other things. It may be necessary to report to Police which should provide an independent incident report. Timely reporting is very important. The insurer may invoke remedies for late notification if they can prove that it was a result of gross negligence and the late reporting has resulted in to a higher loss for the insurer than would have been the case with a timely notification.
On what grounds can the insurer deny coverage?
An insurer may repudiate a claim based on a number of grounds related to the conditions used in the contract – for instance, that the insurance event occurred, or a claim was made outside of the policy period, that the insurance event itself is not covered under the insurance, and even that the insurance event is specifically excluded.
In addition, most Insurance Contracts establish the right for the insurer to terminate, or reduce or deny, an insurance claim in the following circumstances:
- Misrepresentation or non-disclosure at the time of entering into the contract or making a claim;
- Change of risk during the insurance period.
- Breach of conditions highlighted in the insurance policy contract.
- Intentional and gross negligent causations of the insurance event. In liability insurance, the insurer is obliged to cover gross negligent behaviour without any reductions or reactions towards the assured; or
- Lack of mitigation of risk.
Demonstrating a mere breach of the above obligations is insufficient for the insurer to invoke any reactions. There must be causation between the breach and the loss. In relation to misrepresentation and non-disclosure, the causation must be between the breach and the insurer’s decision to provide the insurance to the policyholder. In all the situations above, the breach must have been made with a degree of negligence or intent.
What should an insured do if they are not satisfied with the grounds for the denial of a claim?A denial of a claim can be challenged in many ways, but to ensure that the claim is not time-barred, the insured must as soon as practical send a complaint to the Complaints Bureau at the Insurance Regulatory Authority. Some contracts have provisions for arbitration. If this is the case that option may be explored. However an aggrieved party by either the decision of the Complaints Bureau or the arbiter may appeal to the Insurance Appeals Tribunal. Any party that is aggrieved with the decision of the Tribunal may appeal to the High Court with 30 days of notification of the Appeals Tribunal’s