Tips No 1: General Insurance Claims Handling

Problems making an insurance claim due to the lack of understanding of the subject.

Find out some useful tips on how to handle a claim effectively from a layman's point of view.

TIP No.1

ONUS OF PROOF OF LOSS

On the part of the Insured:
In order to claim, Insured must proved that the loss or damage was caused by an insured peril stated in the Operative Clause of the Policy

On the part of the Insurer:
To reject the claim, the Insurer need to prove any one or combination of the followings:

Loss or damage was caused by an excluded peril
Loss or damage was caused by an uninsured peril
Breached of one of the many Policy Conditions
Breached of Warranty attaching to the Policy
Non disclosure or concealment of Material Facts

Insurer will state the reason for the rejection in a formal reply to the Insured. As required by BNM, Insurer is compelled to disclose, in the letter, the name, address, email and telephone of the Financial Mediation Bureau (FMB) or BNM Complain Bureau for the Insured to lodge his/her complaint if he/she is not satisfied with the decision of the Insurer to reject the said claim.

Before the Insured seeks redress from FMB/BNM, it is advisable that he/she should file an appeal with the Insurer. If the Insurer still maintained their stand and turned down the appeal, the Insured can then direct the case to FMB for a decision to be made. Any appeal should be initiated, within 3 months from the date of rejection as allowed under the terms and conditions of the Policy. If the decision of the FMB does not favor the Insured, he/she can take the case to court. Insurer will defend their "no liability" stand with all the evidence they possessed. The Final verdict lies in the Court of Law.

There was a case involving a fire claim submitted by Asean Paper Mill in Butterworth many years ago, where Insurer initially rejected the claim on the ground of arson. Insured appealed against the decision but was shot down by the Insurer. No other alternative, the Insured took the case to court and after slightly more than 10 years of court battles, the Insurer was found to be liable and had to pay the claim in the region of RM20 million with cost and interests.

FMB was not involved in this case as they can only mediate for claims not exceeding RM200,000 (for motor and fire losses)

Tips No 2: Referring your case to FMB