Friday, November 28, 2014

WHY AN INSURANCE COMPANY WILL NOT PAY YOUR CLAIM


This blog was a lecture I was to deliver at a Workshop in Lagos.

INTRODUCTION

I sincerely wish to thank the organizers of today’s workshop for the opportunity to speak to you and also for thinking it important that among the issues to be treated in today’s event is a topic on insurance.

I particularly and deliberately chose this topic in order to educate, enlighten, inform and change your opinion about “Insurance.” In my number of years in the insurance industry, I have come to realize the attitude of Nigerians to insurance which is a negative one. During a recent study it was discovered that about 800 Adults in Nigeria have insurance (NEPAD), which leaves about huge gap of the population to be uninsured. Also recently a research showed that the insurance industry in Kenya is bigger than the one in Nigeria. Why these poor statistic? The reason is obvious Nigerians don’t like insurance or avoid it like a plague!

I have observed over the years in my talking with people about Insurance that their responses mostly is always the same- “Insurance companies in Nigeria don’t pay claims!” People believe this statement and have become like a cliché and have been passed around from generation to generation. That is why this topic is very vital, it is meant to clear the air and change your mentality about Insurance. 

Ladies and Gentlemen follow me on a journey to discover the reasons why claims are not paid.

After the independence 3 out of 25 insurance companies operating in Nigeria were indigenous. Political independence and the spirit of nationalism led to developments and also the proliferation of insurance companies which was facilitated by the weak conditions set by the 1961 Insurance Companies Act which stipulated a Capital requirement of only 25,000 pounds. The legislation was exploited by investors who established companies – mushroom insurance companies which were too weak to compete with the then expatriate-owned outfits. During these period and afterwards many claims were recorded that were not paid hence people came to the conclusion that insurance expert are more like fraudsters or cheats who take your money and will not pay your claim when you sustain one. This paper is written to correct this notion and hopefully clear all doubts.

However, the good news now is that as time goes on legislation and regulators emerged that changed the state of affairs in the insurance in the country. It should be noted that it is no longer business as usual in the industry. NAICOM oversees the affairs of all players in the industry and is ready to listen the report of any aggrieved member of the public. For the broker, NCRIB and for the Insurance Company it is the NIA and there is a joint body that oversees all report in respect of any industry player, and if all these avenues fail NAICOM will be the last resort.

Before I proceed further, I would like to briefly define the following terms:

Insurance: an insurance contract is an agreement enforceable at law between an insurer and an insured; the insured agreeing to pay a premium and the insurer agreeing to pay a sum of money, or something of monetary value, on the happening of a specified event to the insured.

Insurance Company: an insurance company also called the insurer, is a company that carry-out insurance services.

Insured: an insured is a person who purchases an insurance policy, also called a Policy Holder.

Claims: Claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insureds directly with the insurer or through brokers or agents. 

Now let us attempt to delve into the reasons Why an Insurance Company will fail to pay a claim. I am going to speak plainly in this paper and would at all cost avoid technical jargon for the sake of clarity.  There are many reasons why an insurance company would not pay a claim but for want of time, only 5 reasons would be considered, viz:

1.         Unpaid/Un-remitted premium
2.         Fraudulent Claim
3.         Incomplete Documentation
4.         Insurable Interest Issues
5.         Fake Insurance Cover

Unpaid / Un-remitted Premium: according to the Principles of Insurance which is also true when it comes to the Principle of Contracts, premium (which is consideration in the Law of Contract) must be paid in advance for the contract of insurance to be valid. This is the most important aspect of an insurance cover, without which there is no cover – NO PREMIUM, NO COVER! At times agents, after taking up a policy on someone’s behalf might fail to remit the premium to the insurance company before a loss. However, when such a loss thus occurs, the first thing an insurance company will check is the premium status of the policy. If the premium had been settled before the claim, the claim stands a high chance of being paid in full, all things being equal. However, if the premium was not paid before the loss, repudiation (rejection or refusal) is the remedy. You may ask: How do I avoid this? I’ll tell you. To avoid finding yourself in this kind of embarrassing situation, pay your premium immediately you purchase the policy or pay a deposit premium instantly (in case of part-payment)  and followed by the balance payment immediately. Not only that, if you purchase the policy through an agent then be deliberate, issue your premium cheque in the name of the insurance company on your insurance paper and not the agent’s name.

Fraudulent Claim: insurance is taken for an unforeseeable occurrence i.e. the event, occurrence, loss or outcome must be probable (under probability). If a person, for instance purchase a fire insurance and decides to set his house on fire, it's a criminal act called arson! Or willfully damage his car (in the case of motor insurance) in order to come for a claim - it is fraud! When an insurance company is able to trace a claim to fraud, the claim will be repudiated automatically. I recall a case few years back with one of our clients. This man reported that his car was engulfed in flames from his engine while in motion, which according to him resulted in the total loss of the vehicle on the highway. After documentation the office sent me out to inspect the burnt vehicle at the point he said it was burnt. Armed with my camera, I set out on what eventually turned out to be a wild goose chase. What happened was that, after combing the area alleged to be the spot of the accident without success, I decided to ask some policemen in that area. Surprisingly, they told me that no such accident occurred in that area at the said date and time. Conclusion was that there was no such accident and the insured had reported a fraudulent claim which led to the claim being repudiated.

Incomplete Documentation: if you are filling in a claim be ready to turn in all documents. For example, proof of ownership, photographs, purchase receipt/invoice, estimate of repairs etc in the case of motor insurance claim. And in the case of personal accident claim medical report, receipt of payments etc are necessary. I dealt with this subject in my blog: Documents needed that will make your claims valid. Check out my blog page for that. Make sure your documents are in order and complete without that your claim will be delayed unnecessarily because insurance is based on documentary evidence. So take my advice, tender every document as evidence, be patient. Another client of mine reporting a Workmen’s Compensation Claim was told to supply the medical report, receipts and every other document to show that one of his staff was actually involved in the accident. What he sent was just a picture of the victim on a hospital bed, when we ask for the other documents he became furious and said it was rubbish! Till date the claim is still pending, if he decides to tender the documents the claim will be treated further. So document as if
your life depended on it.

Insurable Interest Issues: Insurable interest is one of the elements necessary to create a valid insurance contract. Insurable interest may be simply defined as the legal right to insure arising out a financial relationship recognized at law, between the insured and the subject-matter of insurance. To have insurable interest in a contract of insurance, the insured must have a pecuniary interest in the subject matter of insurance, which is recognized at law to enable him take an insurance contract on that subject matter of insurance. So it means before one can insured an item or property there must be legal right to do so, i.e. there must either be property right, interest of life, limb or potential liability etc. Now if one does not have right to insure a property, even if he does and at the eventual loss of that property the insurance company now discover that the insured had no interest in the property the claim would be repudiated. The premise here is you cannot insure what you don’t own or have legal right to possess.

Fake Insurance: In Nigeria 80% of the Third Party Certificate people use are fake! It is shocking to note this, but it is true, some people who portray themselves as Insurance Agents are not, they just take people’s money and give them empty paper in the name of Certificates. Do you know that your Third Party Motor certificate actually covers you to the sum of N1,000,000 in property damage to a Third Party and also an Unlimited amount to the Death or Bodily Injury of a Third Party? If you did not know, now you know! 

So buying fake insurance, you are actually short changing yourself, because it is so cheap that you pay N5,000 to get the cover and funny enough a fake insurance cost like N3000 or less to cover nothing! Why not just buy the real thing and get a real cover than the fake one without a cover. Which would you rather buy, fake or real? 

I recall a young man how purchased from my former company a Third Party Cover for his truck and paid N10,000 and as events will have it, he had an accident with  his truck somewhere in Mile 2 and killed a pedestrian. He was charged to court and have to pay like N500,000! He came to the company to claim and it was discovered that everything was in order, he was settled in full. Note that he paid N10,000 and was able to claim N500,000, that’s insurance for you!

In the light of that, I also recall when I was still in an Insurance Company (name withheld) there was this man who rushed to us with a claim and our Motor Certificate, but after receiving the document from him we observed that the certificate was a fake one, it was probably issued by the peddlers of fake insurances, his claim was turned down. The question now is how do you avoid this? My answer is approach the right person – that is where a broker or experts come in or even go to the insurance company directly. 

Instead of bothering your head with all the technical jargon in insurance, just leave it to us as professionals and they will handle it for you. Do you know the good news? You are not paying extra for the services, just your premium.


CONCLUSION

Insurance is a legitimate business and also legal profession therefore should not be taken for granted or with levity. It requires utmost seriousness just like law, medicine and others. Insurance is not a dubious business, it is for your safety and peace of mind. It relieves you of the anxiety of preparing when a risk occurs. If you abide by the advice given above, you would not be stranded or else appoint us as your insurance broker and consultant so that we can take the headache off you. 

For further questions, quotes or queries, email me on john.ideboghie@gmail.com or call 08029961727.



Thursday, November 27, 2014

Jobless applications In the US jump to 300,000

Jobless, employment, security, money, insurance

Americans are feeling the heat as the number of people seeking U.S. unemployment benefits jump last week to above 300,000, the highest in almost three months.

The Labor Department on a report last Wednesday said the weekly applications went up by 21,000 to 313,000. Making it the highest level since the beginning of September. Using a four-week average which is a less volatile indicator, it went up by 6,250 to 294,000.

This increase will not cause any concerns about the overall status of the job market. Some of it were due to seasonal layoffs in business sectors that are affected by cold weather like construction. Claims were under 300,000 for 10 weeks consecutively, which is not the normal level this shows that companies are laying off less workers.

The jobless rate fell to 5.8%, this is the lowest in 6 years, down from 7.2% last year.

Thursday, November 20, 2014

Mother Billed $950,000 for Child Birth in the US

health insurance, health insurance denied, Blue cross

Is giving birth in the US this expensive? Toronto Sun reported about Jennifer Huculak from Saskatchewan, Canada has been billed $950,000 by a hospital in the United States for giving birth to her daughter. This happened last year October 2013, Jennifer was pregnant and having vacation with her husband Darren Kimmel in Hawaii. Then her water broke, she was airlifted from Maui to a nearby hospital in Honolulu, Huculak and was confined in the hospital for 6 weeks before giving birth to a premature baby girl named Reece. She gave birth through an emergency C-section and her child was in neonatal intensive care unit for two months before they were able to leave the hospital.

Saskatchewan Blue Cross, her insurance company said that her coverage had been denied because of a pre-existing condition that the company said that can result to high-risk pregnancy. The doctors who operated her told the insurance company that the pregnancy was healthy but still got denied.



Wednesday, November 12, 2014

Obamacare architect Jonathan Gruber: We Lied About Obamacare, American voters are Stupid

Obamacare lie, Obama lied, Gruber lied, Jonathan Gruber, Jonathan Gruber scandal, Jonathan Gruber video

MIT professor and an Obamacare architect Jonathan Gruber video clip was uploaded on Youtube in which he said that Obamacare is designed fool people and he also claim that the American voters are stupid. The video was posted by AmericanCommitment. It was taken during a panel discussion at the University of Pennsylvania in October, 2013.

Gruber said, "This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. Lack of transparency is a huge political advantage. Basically, call it the stupidity of the American voter or whatever, but basically that was really critical to getting the thing to pass."

"In terms of riskrated subsidies, if you had a law which explicitly said that healthy people pay in and sick people get money, it would not have passed,". "You can't do it politically, you just literally cannot do it. It's not only transparent financing but also transparent spending."

If the Democrats lied about this what else did they lie about? I don't think people can trust them again.



Here is a Second Jonathan Gruber video calling Americans stupid

Saturday, November 8, 2014

Affordable Care Act or the Obamacare is Heading to a Large Number of Dropouts


Affordable Care Act or the Obamacare is Heading to a Large Number of Dropouts, Obamacare, no Obamacare, false

A survey from Bankrate shows that about 51% of people who enrolled in Obamacare last year using exchanges said that they would not enroll again on 2015. The reason is the prices for health plans are much higher and they can no longer afford it.

Reasons for this could be a lot people have work and they are already receiving health care benefits, old people that are now into Medicare, and many found out that the high deductibles and an average of 6% increase in premiums is just too high. The survey also shows that another reason for people to forego enrolling in 2015 is the bug ridden website.

The 2nd open enrollment season for the Obamacare will start on November 15, 2014, it will run for only 3 months about half the time as before. Officials are testing the site to ensure it can handle the demand. The biggest challenge now is getting people to sign up, which is why Health officials will change their pitch, last time they promoted it using the benefits of insurance. Now they are planning to focus more on the financial assistance available to consumers and the penalty for not having coverage. Those without insurance will be fined $325 per person or 2% of income, whichever is larger. This is like the big fat government is bullying and scaring people and force them Obamacare.


Monday, November 3, 2014

Cancer Patient Go Through with her Doctor Assisted Suicide

Cancer Patient, Brittany Maynard, death law, death with dignity law, assisted suicide


29 Year-old Brittany Maynard took her own life using Oregon’s death with dignity law. She ended her life Saturday by swallowing lethal drugs prepared by her doctors. She became the focus of public and media attention when she and her husband publicized that they transferred from Northern California to Portland, Oregon to exercise the Oregon law. She said that she planned to die on November 1.

Maynard ceased her suffering from a very painful brain cancer right on schedule, despite hinting at a possible delay in a video released last week.

Rest in Peace Brittany!