In an exciting collaboration between Minet Malawi, Britam, and The Daily Times - Malawi's leading newspaper - we are thrilled to introduce a groundbreaking initiative that will redefine your Wednesdays. Welcome to the Insurance Insights Column – a weekly rendezvous with the world of insurance and contemporary issues that matter. Every article aims to illuminate the intricate landscape of insurance products and relevant topics that impact us all. The articles will be educative at all levels, catering to both practitioners and non-practitioners.
As published in The Daily Times (Malawi) on February 7th, 2024
In insurance, when an accident or a loss occurs, the insured person has a contractual duty to promptly notify the insurer of how, when and where the loss happened. This is what is referred to as claim condition and is a vital insurance provision. Failure to comply with it can lead to forfeiture of policy benefit or indemnification. Those who insure through intermediaries – brokers and agents – need to report the loss to the broker or agent who arranged the placement. Rule of thumb is that reporting a loss to an intermediary is considered reporting to the insurer.
In the absence of a claim notification condition in an insurance policy, the insured would not be bound to make his claim at any time before it is statute or time barred. It has been an unchanging practice for insurers in Malawi market to insert such condition in the contract requiring notice of loss forthwith and particulars submitted within a specified number of days, usually within fourteen days.
It is important that any person seeking insurance coverage whether personal or commercial insurance must observe policy conditions, including claim notification.
It is the duty of the insured to cooperate with the insurer in investigation, settlement or defense of any claim or suit. Ideally, an insurer aims to reduce claim amount or mitigate its effect on claim reserve. In order for insurers to achieve this, they insist that the insured should relinquish and commute all rights pertaining to the event that resulted into a claim to them through subrogation once the insured’s claim has been settled in full. Thereafter, the insurer recovers in the insured’s name, from those parties that are in the wrong in bringing about the loss or accident.
All necessary documents including legal papers sourced in connection with the accident should be submitted to the insurer as soon as practically possible. For instance – insurers demand a police report in road accidents involving third parties. The police report accounts how, when, and where the road accident happened and goes on to irrevocably cite the party that influenced the accident and hence responsible for the damage or loss incurred. In cases where police reports for road accidents are inconclusive, insurers may withhold policy benefits until a court verdict is reached.
Insurers require that you be examined by a medical doctor of their choice for personal accident cover. All medical reports and other hospital records, such as death certificates and examination reports, must be sent to the insurer. This helps them to appraise the extent of injury or incapacity before coming up with a claim payment scale. There are times when claimants are sent back to medical doctors for re-assessment following disagreement on degree of injury suffered. Naturally, many claimants do not favour this practice. But, sometimes, it works to their benefit. We have come across claimants that have been awarded higher scales after re-assessment than initially allocated.
If a comprehensively insured vehicle is involved in an accident, you are expected to take reasonable steps after a loss to protect the vehicle and its accessories from further damage, expenses for which the insurer will provide coverage. In fact, your insurer pays towing charges up to a certain limit – usually twenty percent of the agreed repair cost. Importantly, the vehicle should be towed to the nearest safe place and not necessarily your home.
Before authorizing repairs to your vehicle for motor insurance or removing debris from a collapsed brick fence for house insurance, it is mandatory to invite your insurer to inspect and appraise the damaged property. This allows the insurers to make their own claim adjustment if they desire. Insurers in Malawi and the world are fully aware that some policyholders with poor moral hazards connive with garage owners, building contractors and sometimes with claims personnel to inflate claims in order to collect excess money for personal financial gain.
Our advice: observe claim conditions to avoid forfeiture of policy benefits.
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