Chapter 11. The Claims Procedure

• Pages: 201-213

CHAPTER 11

THE CLAIMS PROCEDURE

11.1 INTRODUCTION

The procedure for claiming under a contract of insurance is dependent on the nature of the

policy, the nature of the risk insured against and any conditions within the policy imposed on

the insured by the insurer. The fundamental distinction in insurance law is that between life

insurance and indemnity insurance. There are several types of life insurance, ranging from

pure whole life, where there is an undertaking to pay a certain sum on the death of the life

insured so that the claims process would require, inter alia , proof of death; to endowment insur-

ance where proof of the attainment of a certain age is required. In indemnity insurance, proof

of the peril insured against is required. It is important therefore to consider the nature of the

policy and the nature of entitlement to the policy monies in addition to any condition outlining

the procedure to be followed in the case of loss.

1 Conditions outlining the claims process, as we

saw in Chapter 10 , enable the insurer to investigate the claim and often operate as conditions

precedent to the liability of the insurer.

Regional Insurance Acts provide little assistance on the procedure to be followed at the

claims stage. Statutory intervention is restricted to permitting payment of policy monies with-

out evidence of probate or letters of administration up to a given threshold,

2 enabling the

insurer to retain the policy monies or to use policy proceeds to o set a debt owing to the insurer

and provisions requiring the insurer to give notice where proof of age of the life insured is a

condition precedent to the insurer’s liability.

3 Additionally, regional statutes expressly overrule

the doctrine of privity by bestowing a right on a workman who has been injured on insured

premises to pursue a claim directly against the insurer.

4 Consequently, the procedure to be

followed by the insured when submitting a claim is a matter of common sense and the construc-

tion of the insurance contract in accordance with existing common law.

11.2 COMMON LAW

Notice clause

Insurance contracts often contain a notice clause requiring notifi cation to the insurer that a

loss has occurred. Oral notice of loss will su ce unless written notice is expressly stipulated.

‘A provision requiring notifi cation of loss within a specifi c time period will be interpreted as a

condition precedent to the liability of the insurer.’

5 Such a condition must be strictly complied

1 See Chapter 10.

2 Section 101, Barbados Insurance Act No. 32 of 1996, Cap 310; Section 132, Jamaica Insurance Act No.26

of 2001.

3 Section 130, Guyana Insurance Act No. 20 of 1998.

4 Section 100, Barbados Insurance Act No. 32 of 1996, Cap 310; Section 154, Guyana Insurance Act No. 20

of 1998.

5 J. Birds, Modern Insurance Law , 7th edn (Sweet & Maxwell: 2007), p. 241 notes that

In the absence of any specifi c term in an insurance policy, it is undecided whether, upon su ering

a loss, an insured is bound to claim for the loss within a reasonable time on pain of the claim being

denied, or whether it is su cient merely to claim before the statutory limitation period expires.