What is insurance?
Insurance is the aspect of the financial system that is widely used for pooling and diversifying risks so that the consequences of randomly occurring events do not cripple individuals and business. It facilitates savings, investment and employment. It reduces losses through Risk Management expertise and transmits information about risks throughout the society so that economic actors can make more informed decisions. Insurance is generally divided into two classes:

a) Life Assurance – These are insurance products with duration that are dependent on human life. They are usually long term products. The major products are Group Life, Income Protection, Annuity, Gratuity, Personal pension, Critical Illness, Child’s Education and Mortgage Protection.

b) General Business Insurance – These are insurance products with duration that are dependent on the existence of a property or obligation. There are three (3) types:

i. Properties – The major products are Fire, Burglary, Goods and Cash-in-Transit, Motor Vehicles, Marine Cargo, etc
ii. Liability – e.g. Occupiers, Employers, Builders, Product, Professional, Road Traffic, etc
iii. Casualty – e.g. Accident, Workmen’s Compensation, etc


What are the benefits of insurance?
1. Guaranteed financial protection for everything in the society.
2. A culture of long-term saving as a way of life by the general populace.
3. Serving as source of funds to the Government for projects of national development.
4. Meaningful contribution to the GDP and economic development by the Insurance Sub-sector.
5. Visible contribution to improved standard of living and security of lives and property in the system
6. Promotion of financial stability through stimulation of the growth of debt and equity markets for a more efficient Capital Allocation.
7. Facilitation of Trade and Commerce.
8. Reduction of losses through the Risk Management expertise of the Insurance Sub-Sector.
9. Transmission of information about risks throughout the society so that economic actors could make more informed decisions.
10. Encouragement of a greater efficiency and depth in the financial sector through complementing, competing with and otherwise improving the services offered by other financial institutions.


How much do I pay to retain an Insurance Broker or Advisor and how do I find one?
You pay nothing to retain a broker or insurance agent/advisor. The broker, agent or advisor receives a set proportion of the premium you paid to the insurer as remuneration. Whether you retain a broker/agent or not, it will not increase or decrease the amount of premium you pay. It is therefore reasonable to retain a broker/agent. Brokers and insurance advisors are professionals recognized by the government and may be punished if you should suffer loss by reason of their carelessness, negligence or professional mis-advice. To find a registered Broker or Agent, visit the website of the National Council of Registered Insurance Brokers (NCRIB) (create link to www.ncrib.net) or contact the Association of Registered Insurance Agents of Nigeria (ARIAN) at 3 Ajelogo Market Street, Mile 12, Ketu, Lagos.


What is a 3rd Party?
3rd party refers to the body or property of individuals or corporate bodies who are not directly covered under the insurance policy but who may come to risk as a result of the activity of the insured.


What is No Premium No Cover policy?
This is a policy condition that stipulates that if no premium is received for the purchase or renewal of an insurance policy, the policy is invalid. This means that all existing insurance policy holders that have not paid their premiums are not covered. Claims cannot be made by the insured on insurance policies for which the premium has not been paid. The law however recognizes the precarious situations of 3rd parties who may have rights against negligent policyholders and therefore creates certain exceptions in respect of compulsory insurance products and bonds.


What is ”Excess”?
The "excess" is that part of an insurance claim that an insurance policyholder has agreed to bear in event of a loss. The excess could be stated as a percentage of the claim value (e.g. 5% of claim) or as an explicit sum (e.g. N20,000). For example, if the policy document states an excess of N10,000, this means that if the claim value is N100,000 the Insurance Company will only pay N90,000 and the policyholder will bear N10,000. If the claim value is N10,000 or below, the policyholder bears the entire cost. The excess can however be bought back by the policyholder by payment of a little additional premium especially on large and special risks.


What is the Insurance Claims Procedure?
In the event of sustaining a loss which is covered by an Insurance policy, you are obliged to do the following:
1. Take immediate steps to minimise further damage e.g. moving your damaged vehicle to the side of the road, quenching a fire with a fire extinguisher or calling the Fire Service, etc.
2. Take photographs of the incident!
3. Notify your Agent/Broker/Underwriter on phone and in writing ASAP (most Insurance contracts stipulate the number of days for incidents to be reported).
4. Collect estimate of repair/replacement (Avoid exaggerating a genuine claim or filing a fraudulent claim!)
5. Comply with subsequent instructions of the underwriters (i.e. the Insurance Company that issued your policy document) e.g. getting a police report, etc
6. In the event of dissatisfaction with claims amount or processing time, contact INSCAN for help.


What is a genuine claim?
A claim is genuine when the loss or damage suffered by the insured is covered by the contract and is presented to the insurer in the manner had and suffered. It is advisable to always contact your insurance advisor or a broker or INSCAN for advice before buying insurance and before filing a claim against the insurer.


What do I do if the Insurance Company refuses to settle my claim in the event of loss?
The Insurance Company is under obligation to inform you of its decision on your claim within 90 days of filing same and also settle the claim within 90 days of issuance of the Discharge Voucher. Where a genuine claim is refused by the insurer, the insurer may be reported to the National Insurance Commission (NAICOM). NAICOM is the regulatory body for Insurance in Nigeria and part of its responsibilities include ensuring adequate protection of policyholders, beneficiaries and 3rd parties to Insurance Contracts.


What is a Discharge Voucher?
This is a document issued by the insurance company to the policyholder after a claim has been admitted stating the amount that the insurance company has agreed to pay on the claim.


Who is a Loss Adjuster?
This is an insurance claims expert that is sometimes appointed by the Insurance Companies in order to assess your claim from an impartial viewpoint, addressing the concerns of both the policyholder and the insurer, with the aim of achieving a fair outcome to the benefit of both parties, within the terms of the policy. A loss adjuster could visit you, on behalf of the Insurance Company, to assess the level of damage and estimate a possible claim value or justify the claim value you submitted.