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WHY YOUR MOTOR INSURANCE MAY NOT COMPENSATE YOU (FULLY)

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The road is not always predictable – the more reason you need that Motor Insurance cover.

“If you have suffered a loss from the use of your vehicle, you have a right and a duty to lodge a claim under your motor insurance policy”.

It is a right because you have obtained a genuine insurance cover and have paid the required premium for the relevant period. You are therefore entitled to your claim. It is a duty because you will be helping the general public have confidence in insurance. Insurance penetration in Nigeria is very low therefore making prompt claim settlement and quality customer service a unique selling point for insurance companies.

There have however been cases where claims are turned down by insurance companies or the claimants are not satisfied with the amount received as compensations. In our previous article, we have attempted to sensitize you on things to look out for when buying a motor insurance cover. Our objective is to help your understand your rights to compensation and how to go about it.

The need for you to have a good understanding of your motor insurance policy cannot be overemphasized as it contains your insurer’s terms of engagement with you, and forms the bases of their settlement in the event of a claim.

Why would your motor insurance policy turn down your claim or not compensate you fully?

  1. Application of policy terms and conditions; this includes policy limits and exclusions. For instance; Third Party Property Damage limit is N1,000,000.00 except where it has been increased anything beyond this amount is not covered. Policy Excess would be borne by you. If you incur a towing expense beyond that which your policy allows, you bear the excess.
  2. Your loss might not be claimable under the policy; your insurance cover may have excluded the specific cause of loss. For example; flood damage to your vehicle is not covered, and damage to your vehicle outside Nigeria is out-rightly excluded.
  3. Poor documentation of your claim; onus of proof lies with you and where you have been unable to prove beyond reasonable doubt that you have suffered a loss, your claim can be invalidated or repudiated.
  4. Delay in claim notification; Where you have a suffered a loss, immediately notify your insurance company of the claim.
  5. Unauthorized repair; you cannot shave a man’s head in his absence. Before you incur any expenses inform your insurance. Since you would be coming back to them for reimbursement, it is only logical that you have their input.
  6. Unrealistic expectations; your insurance policy will not bear the cost of documenting your claim neither would it bear the cost of maintaining your vehicle for you. The liability of your motor insurance policy is limited to what was damaged on your vehicle or as stipulated in your policy document. Loss of use or consequential loss is not covered.
  7. Fraudulent claim; your insurance company has absolute right to go to any length possible to investigate your claim. Where fraudulent intent is established, they also have the right to repudiate the claim. And where criminal acts or intent is suspected, they also have a duty to alert relevant authorities.
  8. Denial of salvage; in a total loss case, you forfeit the right to you vehicle after you have been compensated. In the case of a partial damage, your insurer has the right to the replaced item as their salvage. Where they suspect any difficulty in retrieving the salvage from you, they might hold onto your claim until you have presented the salvage or penalize you where by way of deducting a certain percentage from you claimed amount where you have denied them their right.

Some of the above points are specific policy conditions, a breach of which could lead to your claim being repudiated and you are denied compensation. While a breech in others could attract penalties and you get a claim settlement below your expectations.

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