Insurance Claim in Nepal | Insurance Claim Legal Guide Updated

Insurance is meant to protect individuals, families, and businesses during unexpected loss. Whether it's a road accident, medical emergency, property damage, or a life insurance payout, the insurance claim process in Nepal must follow clear legal standards outlined in the Insurance Act 2079 and directives of the Nepal Insurance Authority (NIA).

However, many Nepalis still struggle to receive proper compensation due to lack of awareness, incomplete documentation, or misunderstanding the process. This guide explains how insurance claims work in Nepal, your legal rights, insurer responsibilities, and how to ensure your claim gets approved without unnecessary delays.

Types of Insurance Claims in Nepal

The most common insurance claim categories include:

1. Life Insurance Claim

Death benefits, maturity claim, accidental rider benefits.

2. Health / Medical Insurance Claim

Hospital bills, emergency treatments, surgeries, diagnostic costs.

3. Motor Insurance Claim

Vehicle accidents, damage, third-party liability, theft.

4. Property Insurance Claim

Fire, flood, natural disaster, burglary, business property loss.

5. Travel Insurance Claim

Medical emergency abroad, lost luggage, flight cancellation.

Each category has separate documentation and timelines.

Insurance Claim Process in Nepal (Step-by-Step)

Although different insurers may have variations, the core claim process is legally structured.

Step 1: Notify the Insurance Company Immediately

You must inform the insurer as soon as the incident occurs through:

• Call center

• SMS alert

• Email

• Mobile app (if available)

• Direct branch contact

Delay in reporting often becomes a reason for claim rejection.

Step 2: Submit Required Documents

Common documents include:

For Life Insurance:

• Claim form

• Death certificate

• Citizenship copies

• Relationship proof

• Police/medical report (if applicable)

For Motor Insurance:

• Driving license

• Bluebook

• Accident report

• Police report

• Repair estimate from workshop

For Health Insurance:

• Hospital bills

• Diagnosis report

• Doctor’s prescription

• Discharge summary

For Property Insurance:

• FIR (for theft)

• Damage survey report

• Photos/videos of damage

Incomplete documents delay claims.

Step 3: Claim Investigation & Survey

Insurance companies may appoint:

• Loss Adjusters

• Surveyors

• Medical experts

• Mechanics or engineers

The purpose is to verify:

• Validity of claim

• Extent of loss

• Policy coverage

• Exclusions

Step 4: Claim Assessment

After investigation, the insurer evaluates:

• Whether the incident is covered

• Whether policyholder complied with terms

• Whether documents are complete

• Total payable amount

Step 5: Claim Settlement

Once approved:

• Payment is made directly to the insured or beneficiary

• In motor insurance, repair amount may be sent directly to workshop

• In health insurance, direct cashless payments may be available

Insurance Act 2079 requires insurers to settle valid claims within 30 days of receiving complete documentation.

Reasons Why Insurance Claims Get Rejected in Nepal

• Delay in reporting the incident

• Providing false or incomplete information

• Claiming for exclusions not covered by policy

• Expired policy

• Pre-existing conditions not declared

• Lack of required documents

• Third-party negligence cases without police verification

Always read policy documents carefully to avoid disputes.

Insurance Law in Nepal: Key Legal Framework

The Nepali insurance industry operates under:

Insurance Act 2079

Replaced the older Insurance Act 2049. It provides rules for:

• Company regulation

• Consumer protection

• Claim process

• Timely settlement

• Penalties for insurers delaying payments

Nepal Insurance Authority (NIA) Directives

NIA ensures that insurance companies:

• Do not exploit customers

• Follow proper claim settlement timelines

• Maintain transparency

Motor Vehicle & Transport Management Act

• Regulates third-party liability insurance.

Health Insurance Board Guidelines

• Regulate cashless health claim processes.

Under Nepali law, the insurance company is legally obligated to pay valid claims, and policyholders can file complaints to NIA if the company delays or rejects claims unfairly.

The Seven Principles of Insurance Law (Essential for Claim Approval)

Insurance contracts worldwide including Nepal are based on seven legal principles:

1. Utmost Good Faith (Uberrimae Fidei)

Both insurer and insured must provide complete, honest information.

2. Insurable Interest

You must have a legal interest in the insured subject (life, vehicle, property).

3. Indemnity

Compensation restores you to your financial position before loss.

4. Subrogation

Insurer gains the right to recover costs from a third party responsible for the loss.

5. Contribution

If multiple policies exist, they share the claim amount proportionately.

6. Proximate Cause

The nearest real cause of loss determines whether the claim is valid.

7. Loss Minimization

The insured must take reasonable steps to reduce further damage.

Failure to follow these principles may affect claim acceptance.

Conclusion:

Insurance only works when policyholders understand their rights, responsibilities, and claim procedures clearly. By following proper steps, keeping required documents, and filing claims on time, Nepalese policyholders can ensure they receive the financial protection they paid for.