‘If half the population of Nigeria understood how insurance works and how to make claims, no insurance company would end the year in profit.’ This is the belief I’ve held since I first understood finance, considering the uniqueness of Nigeria. I’m writing this post to expose the secrets insurance companies wish you would not find out. If you’ve been wondering how insurance works, what an insurance claim is, or how to profit from insurance, you are in the right place.
If you grew up watching Nollywood, then you almost certainly saw at least one movie themed around ‘Money ritual’. A classic 2000s film typically features a young Kanayo O. Kanayo rising from the abyss of poverty to the pinnacle of wealth, only to lose it all because he got it through ‘rituals’. This unfortunate notion found its way into the society. Hence, if disaster strikes, leading to serious losses, especially if the sufferer is/was rich, everyone assumes he did a fetish ‘ritual’. The honest fact is that life in Nigeria is risky. Disaster could strike anyone at any time. Insurance is that tool one could use to mitigate the impact when it comes. This article is focused on how to make an insurance claim. If you want to know what insurance is and how it works, then see this article. Insurance in Nigeria: All You Need to Know in 2025
The primary essence of investing in insurance is to make a claim if disaster strikes. However, the claims process is one of the biggest challenges for insurance consumers in Nigeria. In fact, some clients accuse insurance companies of deliberately making the process hard and opaque to discourage claims. Unfortunately, everyone loses in this situation. While the customers lose out on the numerous insurance benefits due to the lack of trust, the insurance companies lose potential revenue.
This article aims to guide you through the claims process based on industry standard. I will simplify it so much that everyone can understand, whether or not you have heard of the word insurance before now.
What is a Claim?
A claim is simply a formal communication by an insured to the insurance company (insurer), notifying them of the occurrence of an unfortunate event leading to a loss and seeking indemnity or compensation as promised in the policy document. It involves seeking financial compensation for a covered loss. For example, if a car insurance holder is involved in an accident, he may reach out to his insurer to seek financial compensation to cover the cost of repairs as defined in the insurance contract.
Key Considerations of a Claim
For a claim to be deemed valid, certain conditions must be fulfilled. These conditions include:
- Policy Coverage – This is the primary condition for any claim to be made. The event suffered must be expressly covered in the policy, else the insurer is not liable.
- Time Limit – Some policies come with a time limit between when the event happened and when the claim is reported.
- Policy Excess – Most policies come with a deductible clause. For example, some insurance companies demand that a client contributes as much as 10% of the claim amount before the company settles any claim.
- Cooperation with Claims Process – Finally, every company states its claims process clearly on the policy document. It is important to abide by this process.
Typical Insurance Claim Process in Nigeria
For most insurance companies in Nigeria, the process is quite simple and can be completed in a few short steps. First, you are required to send a notification immediately after the event occurs or at the earliest possible time. Next, the company may demand further documentation, like a police report or affidavit. Afterwards, the insurer sends a representative to carry out a physical post-loss inspection. Then an offer is sent, depending on the nature of the claim. Once accepted by the insured and the deductible is paid, the claim is disbursed within a reasonable time.
How Long Does It Take For Claims To Be paid?
The timeline for claims payment varies by company and the nature of the claim. For simple claims like car insurance, especially where the claim amount is small, some companies have a 48-hour policy after all documentation have been submitted by the insured. Some other claims could take over a month to be paid.
Five Secrets Your Insurer Wishes You Don’t Know
1. Read the fine print
I cannot reiterate this enough. Many policyholders get so excited about owning insurance that they only get to know the content of the policy document when it is time to make a claim. Take the time to read the terms and conditions.
2. Almost everything is negotiable
When it comes to insurance, things are not as fixed as most people assume. From the rates to exclusions and even claims payout, the insured has the right to discuss the terms. For less risky businesses, one could negotiate for lower premium rates. Similarly, when claims occur and a post-loss inspection is concluded, the client is at liberty to reject the offer proposed by the insurer if he is not satisfied. The content of the discharge voucher must be mutually accepted by both parties.
3. Your Cover Comes Into Effect Immediately Premium is Paid
You are deemed to be a valid policyholder once your premium is received by the insurance company, based on NAICOM’s ‘No Premium, No Cover’ policy. Oftentimes, policy certificates are not issued immediately after premium is paid. If a claim occurs during this period, then the insured has rights to demand compensation.
4. NAICOM is your friend
Based on NAICOM regulations, insurance companies will henceforth pay a fine of Five Hundred Thousand Naira (N500,000) for every issue the regulator helps resolve. So, there’s no need to sue when your insurer doesn’t resolve your complaints. You may approach NAICOM for speedy action.
5. You are entitled to discounts
No-claims bonuses are more popular in Western countries. However, even Nigerian insurance companies grant bonuses where a customer who has not made a claim over time renews his cover or agrees to a long term cover. Hence, you qualify for lower rates when you undertake to let your policy run for five years, for example, even though premiums are typically paid annually.