Insurance Claim Denied in Nigeria: Your Rights and How to Complain to NAICOM

Insurance Claim Denied in Nigeria: Understanding Your Rights

Nigeria's insurance industry is regulated by the National Insurance Commission (NAICOM), which operates under the Insurance Act 2003 and subsequent regulations. If your insurance claim has been denied — whether health, motor, life, or property — you have formal rights to challenge the decision through NAICOM's consumer protection mechanisms.

The Nigerian insurance sector has faced significant criticism for claims settlement performance, and NAICOM has in recent years strengthened its consumer protection framework in response. Knowing how to use this system gives you real leverage.

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Nigeria's Insurance Regulatory Framework

NAICOM (National Insurance Commission)

NAICOM is the primary regulator for the insurance industry in Nigeria under the National Insurance Commission Act 1997 and the Insurance Act 2003. NAICOM:

• Licenses and supervises all insurance companies and brokers
• Sets minimum claim settlement standards
• Investigates consumer complaints against insurers
• Has the power to sanction insurers, impose fines, and revoke licenses
• Maintains a Claims Monitoring System

NAICOM has been increasingly active in sanctioning insurers with poor claims payment records. In 2022 and 2023, NAICOM published lists of insurers with outstanding claims and directed settlement, demonstrating real regulatory muscle.

Types of Insurance Commonly Disputed in Nigeria

• Health insurance (including the National Health Insurance Scheme — NHIS — and private health plans)
• Motor insurance (both third-party and comprehensive)
• Life insurance (term life, endowment, whole life)
• Property and household insurance
• Group life insurance (employer-provided)

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Why Insurance Claims Are Denied in Nigeria

Common reasons for claim denials from Nigerian insurers include:

• Premium not fully paid: Policy deemed lapsed due to unpaid or delayed premiums
• Non-disclosure: Failure to declare relevant information at policy inception
• Policy exclusions: The loss falls under an excluded cause
• Late notification: The claim was not reported within the required timeframe
• Documentation gaps: Incomplete or missing supporting documents
• Fraud allegations: Insurer alleges the claim is fraudulent without adequate investigation

Many Nigerian insurers also deny claims by arguing documentation is incomplete, then requesting additional documents repeatedly without ever making a decision — a delay tactic that is now drawing regulatory attention.

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Step 1: Know Your Policy's Reporting Requirements

Before everything else, check your policy document for:

• The timeframe within which you must notify the insurer of a claim (often 7–14 days)
• The documents required to support your specific type of claim
• Any conditions precedent to liability (actions you must take for coverage to apply)

If you reported on time and provided the required documents, the insurer cannot deny on these grounds. If you were late, there may still be arguments around whether the delay caused the insurer any prejudice.

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Step 2: Request Written Rejection With Specific Grounds

Contact your insurer or broker in writing and demand:

• A formal written rejection letter citing the specific policy clause applied
• A list of any additional documents the insurer claims are needed
• The insurer's formal complaints procedure

Under good insurance practice — and NAICOM's guidelines — insurers should provide clear, written, substantiated reasons for claim rejections. A verbal denial or a refusal without specific grounds is not acceptable.

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Step 3: File a Formal Internal Complaint

Write a formal letter to the insurance company's management — addressed to the Managing Director or Claims Director rather than just the claims clerk who handled your case. Include:

• Your policy number and claim reference
• The date you submitted the claim and the date of rejection
• Your grounds for disputing the rejection
• All supporting documents (medical records, police reports, photos, receipts)
• A demand for a decision within 14 days

Keep copies of everything and send by registered mail or email with read receipt.

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Step 4: Escalate to NAICOM

If the insurer fails to resolve your complaint within 14 days, or issues a rejection you disagree with, escalate to NAICOM.

NAICOM Consumer Protection Channels:

• Website: naicom.gov.ng
• Email: info@naicom.gov.ng
• Phone: 09-4612000 / 09-4612001
• Physical address: NAICOM Tower, Plot 1239, Ladoke Akintola Boulevard, Garki II, Abuja
• State offices: NAICOM has regional offices in Lagos, Port Harcourt, Kano, and other major cities

What to submit to NAICOM:

• Your name and contact information
• The name of the insurer and your policy number
• Your claim reference and date of rejection
• Copies of your rejection letter
• Your internal complaint letter
• All supporting documents for the claim

NAICOM will take up the matter directly with the insurer. Given NAICOM's licensing power over insurers, this regulatory attention produces results that internal escalation often doesn't.

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Step 5: NAICOM's Claims Monitoring System

NAICOM operates a Claims Monitoring System that tracks outstanding and disputed claims across the industry. When you file a NAICOM complaint, your claim may enter this system, which:

• Creates a formal regulatory record
• Triggers direct engagement between NAICOM and the insurer
• Can result in directive orders to settle claims

NAICOM has periodically published "lists of shame" — names of insurers with significant outstanding claims — which creates reputational pressure that insurers respond to.

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Step 6: The National Health Insurance Scheme (NHIS) — Special Provisions

If your dispute involves the National Health Insurance Scheme (NHIS) or its successor, the National Health Insurance Authority (NHIA) established under the NHIA Act 2022:

• HMOs (Health Maintenance Organizations) participating in NHIA are subject to NHIA oversight
• Complaints about NHIA scheme claim denials should be directed to the NHIA (nhia.gov.ng)
• NHIA can investigate and direct HMOs to pay for covered services

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Step 7: Federal High Court or State High Court

If regulatory complaints fail to produce resolution, you can pursue civil litigation:

• Magistrate Courts: For claims within their monetary jurisdiction
• State High Courts: For higher-value insurance disputes
• Federal High Court: For claims involving federal statutory insurance schemes

Insurance law in Nigeria is largely governed by the Insurance Act 2003, Contract Law, and applicable common law principles. Courts apply contra proferentem (ambiguous policy language construed against the insurer) and have generally been sympathetic to policyholders in clear cases of wrongful denial.

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Motor Insurance Special Considerations

Motor insurance is mandatory in Nigeria under the Motor Vehicles (Third Party) Insurance Act (Cap M22, Laws of the Federation of Nigeria 2004). If your third-party motor insurance claim was denied:

• A valid third-party insurance certificate creates a statutory obligation to cover third-party injury/death claims
• NAICOM can intervene directly in mandatory third-party claims settlement disputes
• The Nigeria Police Force accident report is the foundational document for motor accident claims

For comprehensive motor insurance denials, the specific terms of the comprehensive policy apply, and standard appeal and NAICOM complaint processes are available.

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Group Life Insurance: Employer Obligations

Under the Pension Reform Act 2014, employers with 3 or more employees must maintain a Group Life Insurance policy covering employees at a minimum of 3 times annual salary. If a group life claim was denied:

• The employer has regulatory obligations regarding this policy
• The National Pension Commission (PenCom) may be involved if the denial relates to employer non-compliance
• File with both NAICOM and engage the deceased's employer

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Common Mistakes in Nigerian Insurance Appeals

1. Not reporting the claim in time. Many Nigerian policies have very short notification periods (7 days for some motor claims). Missing this can provide a legitimate grounds for denial.

2. Not getting a police report for theft or accident claims. Police reports are mandatory for most theft and accident claims in Nigeria. File a police report immediately and obtain the official case number.

3. Paying premiums without obtaining proper documentation. Receipt of premium payment and a valid policy certificate are essential. Always get a proper insurance certificate — not just a broker's receipt.

4. Not escalating to NAICOM early enough. Internal escalation in Nigeria's insurance sector often produces slow results. NAICOM engagement typically produces faster action.

5. Accepting an inadequate ex gratia offer. Some insurers offer partial payments to close disputes. Get legal advice before accepting any settlement payment as full and final.

6. Not involving your broker. Licensed insurance brokers in Nigeria have regulatory obligations to their clients and can escalate disputes with insurers through trade channels.

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Getting Help With Your Complaint Letter

A formally structured letter citing the Insurance Act 2003, NAICOM regulations, and your specific policy provisions is significantly more effective than an informal complaint. ClaimBack can generate a professional, evidence-based appeal letter for Nigerian insurance denials that includes the appropriate regulatory references. Visit claimback.app to create your letter.

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Summary: Nigeria Insurance Appeal The Full Fight

1. Check your policy's notification requirements — ensure you were within the required timeframe
2. Request a written rejection with specific policy clause citations
3. File a formal internal complaint to the MD or Claims Director with a 14-day deadline
4. Escalate to NAICOM (naicom.gov.ng) if unresolved — provide all documentation
5. Contact NHIA for NHIS/NHIA scheme health insurance disputes
6. Pursue civil litigation through Federal or State High Court if regulatory channels fail
7. Engage your broker — they have leverage and regulatory obligations to assist you