Frequently Asked Questions about Insurance
The only certainty in life is uncertainty. We all make plans hoping that everything will go according to plan-however; the reality is that you can lose everything you have worked for in an instant. Insurance offers the comfort of knowing that should anything happen, you won’t need to pick from your hard earned savings to replace what you have lost.
Having to replace your car or house, valued at UGX 10M or UGX 100M suddenly is much more expensive than paying UGX 400,000 or UGX 125,000 to an insurer who would then pay for the cost of replacing your car or house. Insurance works on the basis of probability of loss. For example, out of every 100 car owners, how many will lose their cars in the next 12 months? The principle here, therefore, is that all these owners will contribute premiums to create a fund or pool, so that those who lose their cars are compensated from the contributions of the many who did not suffer the same loss. This explains why insurance premiums are low when compared to the actual cost of the item insured.
You can insure anything that you can attach financial value to.
That’s easy. Contact a licensed insurance company or a broker and let them know exactly what you are looking for.
Insurance companies are licensed to either provide Life Insurance and General (or non-Life) Insurance or a combination of both. It, therefore, only matters in as far as what that company is licensed to provide.
An insurance policy is written with you in mind so take the time to figure out exactly what you want before having a conversation with an insurer. Do not feel pressured to buy an insurance product before fully determining if that particular product meets your needs. You might also want to look at a number of products before making up your mind. Feel free to ask your insurer for a sample policy document and claims procedures and read the policy conditions and exclusions in order to fully understand what is covered and what may be excluded in the policy before you pay for it.
The claims process generally differs from policy to policy and your particular process should be explained to you when you are taking on the policy. You are entitled to a copy of the claims procedures from the insurance company you are dealing with. These guidelines are in place to ensure the smooth running of the relationship between you and your insurer for the length of your policy.
Once you have met all the requirements of the process and your claim is found to be genuine, the insurer will issue a discharge voucher which has the detail of the claim amount to be paid. If you are in agreement with it, you need to sign off and return the voucher so that the insurer can process the payment. The industry claims processing guidelines require that all claims should be settled within ten (10) to twenty (20) working days of the claims settlement voucher being returned. The time frame is largely dependent on the amount of the claim.
Whereas the claims process might seem tedious, this process is in place to ensure that expectations are met and managed for you (the claimant) and for your insurer. An insurer, for example, needs to make sure that the right person is making the claim and that the right person is being paid. For example the insurer may ask for a letter of administration of the estate if a deceased policy holder has not left a will. Similarly, the insurer needs to check the validity of the claim, in order not to pay fraudulent claims. For example, an insurance company may ask for a police report to ascertain that an accident did occur or a death certificate to confirm that a person did die. That being said, there are stipulated claims payment periods that every insurer must comply with. If you have an insurance policy, you are entitled to get claims payment procedures from your insurer in order to know what is expected of you and the insurance company in the event of a claim.
When you take on insurance, you are paying for the comfort or peace of mind that if the unexpected happens, you will not have to bear the financial burden of replacing something precious to you. If, for example, you hired a security company to guard your house and paid them a monthly fee, that company would not refund your money if your house was not broken into the month before. You paid for the peace of mind of knowing that if your premises had been broken into, someone would have apprehended the burglar. In the same way, if anything had happened and you lost something, having an insurance policy would provide the comfort of not having to replace it with your own resources.
As mentioned earlier, insurance is based on the probability of loss. After a loss has occurred, it is no longer a probability, but rather a certainty. It would therefore be difficult, if not impossible to determine the proportion of premium you should contribute to the pool without being unfair to the other policy holders who had already contributed.
No, although it is compulsory for you to have motor third party insurance, it is not a tax. Its purpose is to protect other road users that may be injured or killed by the use of your motor vehicle. The premiums and benefits payable are set by the law. In case of an accident, the MTP Act provides for up to UGX 1M in the event of bodily injury or death. This means that your insurance company will contribute up to 1M to the victim or their family in case of death. This does not mean that the victim is only entitled to 1M; it means that the insurance company will only contribute 1M towards the amount the insured owes the victim. If there are many people claiming from one accident, MTP will pay an aggregate 10M.
You may contact Uganda Insurers Association (UIA) on Insurers House Plot 24A Acacia Avenue, Kololo, call +256 414 500945/6 or email firstname.lastname@example.org. You may also contact the Insurance Regulatory Authority (IRA) on 0800124124.