What the public must know.
The National Insurance Commission has directed all insurance companies to impose limits on Third Party Injuries and Death on all Motor Insurance policies, effective July 1, 2019. Motor Third Party Insurance is compulsory in Ghana. According to Section Three of Third Party Motor Insurance Act 1958, any user of Motor vehicle on public roads in Ghana should have insurance in place to cover injury to Third Parties. The Motor Third Party Insurance provides cover against third party legal liabilities arising from a motor and resulting in injuries, death and third party property damage.
Insurance Act, 2006 (Act 724)
Section 44 of the Insurance Act, 2006 (Act 724) provides that ''the Commissioner in consultation with the Insurance Industry shall by regulations prescribe a formula to compute compensation in respect of injury and deceased claims arising out of a motor accident." This law provides that motor insurance cannot be provided for an unlimited amount of exposure. In other words, the law requires that motor insurance policies must have anticipated maximum exposure limits at the inception of the policy. Whiles there have been pre-defined standard limit of GHC5,000 to third party property damage, that of third party injury and death is unlimited. The limitation period within which a person can make a claim for injury or death due to accident is three years.
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Limits on Injury
Over the years, there have been a number of laws, regulations, directives and guidelines in the areas of motor insurance and motor claims, and claims for injuries and death have always been unlimited. Unfortunately, none of these provides basis and guidelines for the computation or the determination of the quantum in the event of injury or death arising out of a motor accident as required by the Insurance Act. Naturally, the nature and severity of injuries will have the most impact on how much one can expect in the event of a claim. The more serious injuries are, the more likely a claimant’s medical expenses, lost income, and other damages. All of that generally leads to a higher settlement or award.
A person involved in a motor accident who got injured or died later of injuries shall be paid medical expenses incurred up to a maximum limit of GHC 20,000 subject to proof of verifiable medical receipts.
In all cases the determination of the temporary disability shall be by a qualified medical practitioner. The period of temporary disability shall be determined by medical examination.
The degree of physical injury shall be determined by the appropriate medical professional who assesses the level of physical disability for the computation of injury compensation.
Loss of Earnings
This loss is only compensated if it is linked to the allocation of a permanent disability level of at least 50%. Permanent disability should cover a situation where the claimant is unable to work and has not worked for a period exceeding 52 weeks.
The claimant is entitled to nursing care if permanent disability results in double amputation or similar condition, head or brain injury, total loss of sight in both eyes, and any similar conditions as may be recommended by the medical professional. The insurer shall pay for nursing assistant care an amount up to GH500.00 per month for a maximum period not exceeding 52 weeks.
This loss is only compensated if it is occasioned by physical injury caused by a motor accident and linked to the allocation of a permanent disability level of least 60%.
Loss of Education Progression and Career
Loss of Education progression and career loss mean loss of a certain chance of educational progression and career to which a pupil or a student of primary, higher education or their equivalent may reasonably aspire, or the career loss incurred by a person already engaged in active service.
Pain and Suffering
Pain and suffering refers to the physical and emotional stress associated with an accident and the injuries caused by it. For example, if a passenger was severely burned in a car accident, the driver would probably recover money for the agony of enduring the burn itself, and the discomfort it caused.
Disfigurement is the state of having one's appearance deeply and persistently harmed medically, such as from an injury, wound, surgery or scars due to motor accident. However, the Motor Injury Claims Limits per person is now GHC50,000.00. The injury claim amounts stated excludes Solicitors' fees, and Medical Expenses.
Special Cases Injuries
These are injury cases that an insurer would have to deal with very infrequently. That is at most once a year. Special case injuries include paralysis, double amputation up to the knee or above or similar condition, severe head/brain injury, total loss of sight in both eyes, and any other similar condition as may be recommended by medical professionals. In addition to covering all medical costs associated with special injury cases, the claim amount will be up to GHS300,000 (this may be subject to a rate of 5% increase on the basic amount per annum).
Death Claims and Limits
The Insurer would pay death benefits in respect of a third party who dies as a result of a motor accident as defined under the claim settlement guidelines of the National Insurance Commission as stated in the "Summary of Laws" under Section 1.
Where the victim was hospitalized prior to death, receipted medical expenses shall be admitted and paid up to a maximum of GHC20,000.00. In the absence of receipts payment shall not exceed GHC1,000.00
Depending on the age of the deceased, the insurer shall pay an amount not exceeding three times the prevailing Annual Minimum Wage as funeral expenses. The prevailing Annual Minimum Wage is GHC3,240.00.
Depending on the age of the deceased, the insurer shall pay an amount not exceeding four times the prevailing annual minimum wage as benefit to spouse. If the deceased had more than one spouse, payment shall be divided equally among them.
Depending on the age of the deceased, the insurer shall pay an amount not exceeding three times the prevailing annual minimum wage as benefit to be shared among dependents. "Dependents" here excludes spouse and refers to children and parents.
Death Claim Limits
Death Benefit is equal to ten times the Annual Minimum Wage. The death benefit includes the funeral expenses, spouse benefit and dependents benefit, all put together.
This directive is exclusive of Legal and Solicitors' fees. This is because, once the limits are already determined, there will not be the need for claimants to employ the services of a solicitor for negotiation.
Eligibility for Compensation
The victim must have been injured or died in a Motor accident in circumstances covered by a Motor Insurance Policy.
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When an insurer is notified of a claim, receipt should be acknowledged within 10 working days. When the insurer receives all relevant documents for the claim, liability should be determined within 5 working days. Where liability is not admissible or denied, the insurer has to inform the claimant of the reasons in writing within 5 working days. Where liability is admitted, the insurer has to compute claims and discuss same with the claimant within 10 working days. When the claimant signs the discharge form, the claim should be paid within 7 working days. All motor insurance claims are to be settled and paid within 30 working days upon receipts of all relevant documents. Reasons for delays should be clearly stated in the claim file for the inspection of the regulator. Where claims are unreasonably delayed, The claimant has to report the insurer to the Commission for appropriate sanctions.
Denying a Claim
The insurer can deny third party injury or death claims base on the following reasons.
If the vehicle is driven without the owner's consent, order or permission. Also, if the vehicle is driven by the owner, or by any person without the owner's consent, who is not licensed to drive the vehicle under all relevant laws. The insurer has the right to deny the claim if the vehicle is driven by any person with a percentage of alcohol in his/her breath or blood in excess of the percentage permitted by law, or who refuses to provide or allow the taking of a sample of breath, blood or urine for testing or analysis. Then any claim resulting from death or bodily injury to any employees which arises out of and in the course of their employment unless such employees are being carried by reason of or in pursuance of a contract of employment. For bodily injury or death occasioned by lawful seizure or other operation of law. For any claim arising out of any contractual liability. Claims in respect of death or bodily injury to the owner of the vehicle or the driver in control of the vehicle unless under Brown Card extension. And for any accident which occurs outside ECOWAS.