You have gone to your agent, broker or insurance company to claim, only to find out that you have opened a huge can of worms. Let’s see how we can understand the process and procedures of claiming.
Where does my premium money go?
This is the question most people ask when they make a claim and it is not honoured. The money you pay on your motor insurance policy is not merely set aside in case you need it; instead it is put into one big pot. Here’s a typical breakdown of where the money from your premium goes:
• 50% to pay claims.
• 25% on legal and administrative costs.
• 25% for costs of running the company.
These numbers vary between insurers. Some are better than others at saving and on cutting their overheads. Most of the money paid out on car insurance claims is paid on property damage claims. Insurance companies also spend money on commission payments which further increase the costs of running an insurance company.
Overview of Claiming
Each agent/broker/insurer has got their own procedures on how claims are dealt with and what is required from you at what time. There are documents you must obtain and present to your agent/broker/insurer, along with a fully completed claim form. Your claim will be logged and an insurance assessor/loss adjuster will be appointed.
On average a claim which is not complicated should take up to 2 weeks to be settled by an insurance company (from the date which you handed in the required documents). We must remember that most large claims require an assessor/loss adjuster. Who will view your vehicle and compare the damages to the repair estimate, thus presenting a report with their recommendations to your insurer. This report plays the basis to what the insurance company will pay up to or even if they are going to settle your claim at all. When all the documents and the assessors/loss adjusters report have been presented to the insurer, you should receive a letter (repair authorisation) within 3 working days.
Delays can occur in settling your claim because of negotiations between your insurers and the garage where the repairs are going to take place (garages tend to inflate their repair estimates, when they know that an insurance company is going to be paying the bill). People tend to get frustrated with such delays. Think of it this way, would you pay someone to repair your vehicle without negotiating the price first? I think not. It’s the same for an insurance company; they have to make sure that they too are not being ripped off. Otherwise if they paid repair estimates without a care in the world, they could find themselves in trouble by running out of money to pay claims.
Remember you’re not the only one claiming and therefore sometimes a gentle reminder to your agent/broker/insurer may be required. If you feel that things are taking too long and you have not been informed of your claims progress, I would suggest writing an email to your contact person giving them a deadline to advise you what the claim status is; if you still don’t get a response then follow up by contacting someone in higher management. If this fails you can report your situation to the Insurance Supervisory Department.
The new law, Insurance Act 2009, was passed in April 2009 by Parliament and will benefit us all. The new law forces insurers to pay eligible claims within 45 days of the reported accident. This law allows the Commissioner of Insurance to make sure you get your settlement quickly. The Commissioner has been given the power to fine insurers who do not adhere to this new law not more than 5,000,000/- tshs on top of the claim amount.
Claims Handling
To enable your claim to be dealt with quickly and efficiently, it is very important that you notify your agent/broker/insurer of the loss or any occurrence that may give rise to a claim immediately. You can do this by telephone, email, letter or you may visit their office. After notification they will do the following:
• Notify your insurers immediately (if you have gone through an agent or broker).
• Give you a claim form to complete.
• Advise you of the documents required and verify them to ensure their validity in relation to the claim in question.
• Advise you on each stage as the claim progresses.
• Prepare and send you a claims’ update.
Some small but very important things you must note or comply with to avoid problems in motor claims should they arise.
• Make sure that you have fully paid your premium.
• Ensure that you have fitted your vehicle with the recommended Anti Theft Device. This is a must to avoid paying higher excess.
• Ensure your vehicle is at all times roadworthy. Worn out tyres should never be used even as spares. Your policy contains a maintenance warranty and if your vehicle is not properly maintained the insurers may not honour your claim.
• Declare the values if you have fitted your vehicle with non-standard items like Alloy rims, special tyres, mini TVs, etc. This will enable your insurer to charge any additional premium so that your claim will be paid without problems.
• Your windscreen claim will not be subject to payment of excess should the damage also involve other parts of your vehicle. However if it is damaged on its own then the excess will apply. A photograph of the damaged windscreen is a requirement. Please take one before you carry out repairs.
• Ensure your vehicle is adequately insured. Avoid over insurance as you will only pay extra premium unnecessarily. Also avoid under insurance to avoid the average clause condition which states that you will be responsible for the proportion of loss arising from under insurance, meaning you will be liable to pay part of the loss.
• You should never insure your vehicle tax free as this will constitute underinsurance. Please note that should a claim occur the vehicle will be repaired with parts that are subject to tax which is unfair to the insurers.
• Never allow your vehicle to be driven by unauthorized or by unlicensed drivers.
• Note that you will be asked to meet any costs arising from betterment of your vehicle should a claim arise. If your vehicle is partly damaged at the front but requires full repainting you will be expected to chip in for the subsequent charges proportionately.
• Never use your private vehicle to ferry passengers like “daladala’s” or “taxi bubu’s”. Any claim arising from an accident will not be processed by your insurer.
• Report all incidents immediately, especially if there are any injuries to passengers or third parties. The same should be reported to police and a report obtained.
After an accident please do the following (in no particular order);
• Make sure everyone is ok and does not need medical help.
• Move safely away from your vehicle and put hazard signs on the road to warn other drivers.
• Take pictures of the accident and both vehicles even by using a camera phone.
• At an appropriate time contact your insurance company to let them know about the accident, make sure the other person contacts their insurance company too.
• Talk to the other person involved in the accident and get their insurance and contact details.
• Take all details; location and cause of the accident, time, weather conditions, type of road surface, warning given, lights showing on the vehicle and the estimated speed before the accident. (you will need to fill a claim form which will ask for this information, so to avoid forgetting anything make a note)
• If possible obtain witnesses.
• Never ever admit liability.
• Notify Police immediately (A must for all cases especially injury claims).
• After the Police have recorded the accident, move your vehicle to a safe place.
• If you can’t go to the nearest police station then give a full statement of what happened there, and get the contact details of the police officer including their police identification number.
• Enquire when you can follow up about the police documents which you will need to present to your agent/broker/insurer.
• Obtain a Police accident report and vehicle inspection report.
• Obtain an estimate of the repair cost from a garage.
• Complete a claim form. Please fill all the details required, and consult with your agent/broker/insurer if you need help.
• Submit all third party correspondence received answered or acknowledged to your agent/broker/insurer.
• A copy of driver’s license and insurance cover note is required by your agent/broker/insurer.
• A copy of the vehicle registration card or other proof of vehicle ownership is required.
• If your vehicle is impounded by the police you will need, the original insurance cover note and the original agents/brokers/insurers receipt for proof of payment. So they can release your vehicle.
In case of theft of your vehicle (in no particular order):
• Notify Police and your agent/broker/insurer immediately.
• Obtain a Police report.
• Cooperate with your agent/broker/insurer/police.
• Produce the original registration card of the vehicle.
• If your vehicle is stolen and not recovered, your agent/broker/insurer will require an original log book (if you have one), car keys (full set), copy of driver’s license, and original certificate of insurance (cover note).
• Applicable excess is payable before the release of a settlement.
JACOB’S TIPS:
Claiming is a stressful job, because your emotions are all over the place. If you have taken your insurance directly then you will have to negotiate for yourself; if you went through an agent or broker then they will do the negotiating on your behalf. Having said this, if things move at a slow pace don’t just sit back and wait, contact your agent or broker to see what is happening. Insurance is a customer service industry; therefore it’s your right to get the best service from your insurance provider. My motto is “no action, then show them your reaction”.
If you are the victim of an accident and want to claim from the other persons insurance, make sure the other person notifies their agent/broker/insurer. You will not be able to claim from them if their insurer has not been notified. This is because their insurer will have no records of the accident and will not want to take your word against their clients. To avoid this make sure that you and the other person at fault inform your respective agents/brokers/insurers and give each others numbers to them too in case they need to follow up.
The aim of motor insurance policies is to have your vehicle restored to as near a condition as the one it was in before the accident. Based on this principle, for a relatively new vehicle, damaged items will usually be replaced with new parts. However, for vehicles more than three years old (number of years can differ from company to company), the insurance company may want your vehicle to be repaired with good-quality reconditioned parts. When purchasing a motor insurance policy, you should ask the agent/broker/insurer to explain to you their replacement policy (i.e. whether your vehicle will be repaired with new or used parts). Your agent/broker/insurer should disclose to you any restrictions on repairs before you buy the policy.
Both you and your agent/broker/insurer have the right to cancel the insurance policy for any reason within a written period. Insurance companies can decide not to renew a policy after a major accident claim; these are business decisions of the insurance company. If your agent/broker/insurer cancels the policy, they will refund you the unused proportion of the premium. Some companies refund the premium on a pro-rata basis with the deduction of a small administration fee. Others use a method that calculates what would have been charged if your policy were a short-term policy. This usually applies if the cancellation is at your request. You should check with your agent/broker/insurer how it calculates policy refunds. Note that refunds may be subject to a minimum amount, and that your agent/broker/insurer may reserve the right not to refund any premium if a successful claim has been made on the policy.
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