Insurance companies do pay claims

Insurance companies do pay claims

By Flavia Mpagi

opinion
Many people's perception of insurers is that they do not pay claims. Are these beliefs justifiable?
Mr Kaddu's supermarket was broken into a year ago, resulting in the loss of Shs 10m in cash. Luckily, or so it seemed, he had insurance cover. However, his insurer informed him that his claim was not covered by the burglary Insurance policy he had, and that only a money policy would cover the loss.
Early this year, Kaddu's cashier stole Shs 3m and despite having a money policy, he was not compensated. Apparently, the money policy did not cover such losses but a fidelity guarantee policy did. Many people's insurance claims are not paid because what they are claiming is not covered by the insurance policy they signed up for.
Most of us only discover what we are really covered for only when trying to make a claim. Then again, knowledge of the different policies offered in the market can seem a little too much to take in for the average individual, but industry experts exist to assist with this issue.
Insurance brokers do not sell insurance policies and so will not try convincing you to buy insurance from their menu. The fact that their interests lie in satisfying the clients' needs, makes them perfect for this job. While it may not be possible to read through a 30-page policy document, let alone understand all the technical jargon it contains, it should not result in the abandonment of the benefits of insurance.
Let the insurance broker carry the burden of enlightening you about the different policies. The perception that insurers do not pay claims is also caused by the tedious and long claims processes that some insurers have. However, this does not apply to the majority. Some insurers actually settle claims within one week of informing them.
In an attempt at combating tedious and long claims processes, The Insurance Regulatory Authority has set claims guidelines for all insurers in the country that clearly outline time frames within which claims should be settled. For example, claims of up to Shs 10m should be settled within 10 working days of receipt of the discharge voucher.
The Authority has also stepped up its vigilance and enforcement arms hence improvements in this area are already being seen.
The author works for the Insurance Regulatory Authority of Uganda.