A misrepresentation is a statement, whether written or oral, that is false. Generally speaking, in order for an insurance company to void a contract because of misrepresented information, the information in question must be material to the decision to extend coverage.

Concealment, on the other hand, is the failure to disclose information that one clearly knows about. To void a contract on the grounds of concealment, the insurer typically must prove that the applicant willfully and intentionally concealed information that was of a material nature.

A warranty is a statement that is considered guaranteed to be true and, once declared, becomes an actual part of the contract. Typically, a breach of warranty provides sufficient grounds for the insurance contract to be voided (declared unenforcable) e.g Some Fire insurance policy for business premises may contain a ‘Records Warranty’,

This warranty states that the insured should keep Records of all purchases, sales & banking records pertaining to the business in a fire proof safe or away from their premises outside business hours’ When a fire occurs and a claim for stock is initiated and its discovered that the insured did not have such records the insurance company may declare the contract void hence claim not payable.

Some insurance claims may not be recognized by the insurance company for any number of reasons. If a claimant’s premiums have not been paid in full, the policy itself may not be active. Another reason that a claim may be rejected is a failure to fall under covered conditions.

Most insurance policies spell out specific areas which qualify for benefits. The areas that do not qualify for benefits are called exclusions. Exclusions are indicated in the policy documents and a claim made on exclusions is not payable.

The claim notification period is the period within which a claim needs to be reported to the insurance company after the claim occurs. If the claim is not reported to the insurance company within this time period, the Insurer will have the right to decline the claim.

It is very important therefore that claims are advised to the agent (who ensures that the same is reported immediately to the insurance company), and all claim requirements completed, before the notification period expires.

The excess is the amount you have to pay if you make a claim on your insurance. Excess varies depending on the policy taken up and is indicated in the policy document which is given at the time of taking up cover, your agent is also able to advice on the amount payable as excess for any type of claim.

A vehicle is considered to be a total loss when total cost of repairs meets or exceeds a certain threshold set by the insurance company which when compared to the Pre – accident value is found to be ‘Uneconomical’ to repair. The insurance company then gives an offer to the client for the value of the vehicle as per the insurance contract.

Advice your agent ASAP, different types of claims have different requirements and processes which an agent should be able to advice.

An insurance claim is the actual application for benefits provided by an insurance company. Policy holders must first file a claim before any money can be disbursed to the hospital or repair shop or other contracted service.

The insurance company may or may not approve the claim, based on its own assessment of the circumstances.