Why Nigerians Should Take Insurance Serious

Fumilayo Odamah is the regional manager of Niger Insurance Plc. Chatting with Femi Ayodele of Naij.com, she spoke on the lukewarm attitude towards insurance policies in Nigeria; the demerits and the merits of having insurance cover.

What is your observation as regards the attitude to insurance policies in Nigeria?

I observe insurance policies have not been fully accepted in Nigeria. Most Nigerians still believe it doesn’t work. They are yet to understand how someone would pay a premium of N5, 000 and receive a claim of N1 million. The public awareness is very low and the acceptance is not encouraging. You can’t embrace any policy if you don’t believe it. They don’t have confidence in the policies that is why they are not interested in having insurance cover.

How can this perception be changed?

I think there is a need to create more awareness and we have to target schools as starting point. You know we all took insurance as a course in secondary school but after school, most people tend to trivialise the importance. The public enlightenment should start from primary schools. It is important to educate people about insurance; telling them the necessity and the benefits. Most times when you start, it’s like you are giving a lecture. When you talk about the gain, the response is often ‘so insurance can do all these? If we start teaching from primary, secondary to university level, people would have better understanding and they can deem it fit to insure their properties, lives, and other properties.

Can you expatiate more on the benefits of insurance and why it’s so important?

So important!!!Insurance is to place you where you were before the incident occurred and that is what we call indemnity. For instance, if you have a laptop and there is no insurance for it and the laptop was stolen, there is no way you can get it back unless you have to buy another one. Let’s assume you don’t have the money, to purchase a new one becomes a challenge. If you have a cover for the laptop, there is an existing contract and the law mandates the insurance firm to take responsibility. You are assured that the insurance firm would wade in and put you where you were. So that is what insurance is all about. May be a policy was taken on this house. In case there is a fire incident, the insurance firm now says okay the sum of what you paid to us is N20 million, you are offered the money to replace what was damaged; you can easily renovate that house. It’s just a financial backing. To give financial backing and it is very important. I don’t know why Nigerians are not taking advantage of it. They have the impression that insurance company will not pay. With the level of awareness and regulation in the industry, there is nobody in the industry that would refuse to pay claims. Such company would be sanctioned for it.

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How easy it is to get claims? There is the impression that it takes time and the processing could be frustrating.

You know when there is a claim we would like to investigate. We would want to know if it is genuine. Like a motor claim, it takes the company 30 days after the person has given you everything you ask for because sometimes if he did not give us correct estimate, it will be difficult to pay claim. For instance, a claim was reported in 2012 but since then, the person did not come back until recently. The man claimed he has not been around but we have to refund it that is another reason. When an incident happens, you have to inform the insurance company within 30 days. If you did not inform the firm, that means we will take it as a nothing happened. This is part of little things people ignore and they could miss the cover for this reason. Most times when they give you a policy that is the contract, you are supposed to read it and the conditions. But what happens most times is that when there is a loss, you see them contacting the insurance firm three months after. But in the policy, it is stated you have to report within 30 days unless the person is incapacitated or an accident occurred, you are admitted in the hospital and unconscious, so you cannot report it. So there are lots of factors. When there is a claim, there a lot of things to be considered. But if it’s a genuine one and you have committed everything, within 30 days the person is supposed to be paid. Why most Nigerians complain is that they don’t know what to insure. If somebody has a property policy and complains that somebody dent his car or it got damaged by another person. What you have is a property policy which does not cover a car policy. He goes round telling people they didn’t pay his claim, it’s a different thing. Some people don’t have genuine policy. Some people can come to the office and show you certificate of insurance. When you check record, you don’t have their names on your record but that person would claim the insurance company fails to pay.

You mentioned vehicle insurance. I observe there are fake vehicle insurance certificates in circulation. Especially the third party insurance type. What is responsible for this?

For now it’s being controlled. How it’s controlled is that Vehicle Inspection Officers (VIOs) are now involved. When the officers request for your certificate of insurance, they crosscheck with their records or data. They have the record on their system. They would input the name of the issuing firm or company. If it did not bring it out the name of the company, that is fake. Those fake insurance certificates often come from the local government. They will issue certificates to people but it is better for anyone who wants the insurance e cover to first go to the company that has that policy and tell them to verify it if it is theirs. Then you will be able to know if you have a cover or not. Most times what you have is people approaching an agency to get cover. Why can’t they just make enquiries from an insurance company? If you obtain a motor insurance certificate or policy and you are not sure if is authentic or not, you can confirm by writing the company. We have email and everything on our website. They will easily reply and confirm if the certificate is from the company or not.

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Can you expatiate on the types of insurance cover available in Nigeria?

We have several policies. We have the motor, life and non-life insurance policies. When you talk about the non-life insurance that is the general businesses line; fire insurance, fire and burglary insurance. The fire is to cover you against any lost to have to do with fire. The burglary covers you if there is a forceful entry or forceful exit from your house: incase someone gets in and steals any of your properties. Burglary insurance covers it.
We have the employer gratuity. This is to be taken by the employer to cover the employees in case any accident occurs while they are on duty. It’s called off gratuity. We have the group partner class which is just like employer gratuity. The only difference is that the former has a limited cover; it covers just when you are on duty while the latter covers you for twenty four hours.
Another thing you can enjoy under employer gratuity policy is unlimited medical. We have money insurance to cover cash lost in transit during office hours. Maybe someone or the cashier is taking money to the bank and it was stolen or got lost during the transit, money insurance takes care of that. We have cash in transit, cash in stay and cash at hand. In he is robbed, fidelity guarantee covers that. Fidelity guarantee is taken by the employer to cover him against fraudulent activities or dishonesty of his staff that is in possession of cash and anything that has to do with property. Like in a case where a store officer sells part of the things in the store. How it works? You just report after taking account of what was stolen. You report to the police. The police take action against that person while you inform your insurance firm immediately. The firm takes it up to know how much is involved, if there is insurance cover, the company pays fidelity guarantee.
We have public liability. The public liability is a policy that covers you against third party coming into your building. If by your action or inaction that person gets injured, public liability insurance covers the expenses you will incur. If you have a public liability and its happens you have an antenna or mars on top of this building. If there is a storm and the antenna or another person’s property gets destroyed, the public liability policy can pay for it.

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What are the processes involved in getting claims?

Like I earlier said, to get a claim, the insurance company should be informed immediately. Within 30 days. If there is a claim, if the person is not incapacitated, you call the insurance company immediately. You can contact them by telephone, email or letter. When you write the company, they will reply you immediately and attach a claim form that you should fill. Immediately you input your details in the form, they will tell you some other document you need to bring. Let’s say there is a fire incident, they will give you a claim form to fill; ask you an estimate of loss, what got damaged, report from fire fighters who were involved. If there was no fire fighter, who were the witnesses? .These are part of the details a claimant would provide. Fire service report is very important. You are expected to state when the fire happened, what was saved or recovered and other details. After you have submitted that, it is for the insurance company to take step. The firm appoints an external adjuster that will come in. He would serve as a link between the two parties. He would ask few questions: what got burnt, the cost and he verifies. After these things have been verified by the adjuster, he would submit the report to the insurance company. The company now handles it in line with the policy given. It is possible to say this laptop is N20, 000 but in the policy given to you, you stated N10, 000. Did you pay premium? Was the premium paid before the lost? All those things will be taken into consideration before the company settles the case. Once this is done, it will take within two or three weeks to finish up because the firm we have to do market survey to make sure that the market value tallies with what you gave. Once this is verified, the next thing is to give you the digit which we call the dispatch voucher. The dispatch voucher states the estimated amount of money and the breakdown of what they are paying you. If you agree, you put your signature and the firm endorses it with a stamp. You are to return it to the insurance company to claim your money.

How would you rate insurance industry in Nigeria?

The industry is strong and reliable because have a governing body that regulates the activities of all insurance companies in the country. If there is a claim and the person is not paying, you report to National Insurance Commission (NAICOM). They take the company up immediately. They are expected to call both parties and ask why they are not paying. If it’s a matter of indemnity, both parties agree on the amount. So it is not easy for any company to collect people’s money and not fulfil its obligation. Nobody can do that anymore. The industry is now regulated that you cannot cheat anybody.

Source: Naij