Frequently Asked Questions (FAQs)


Brief definition of insurance

Insurance is simply a legal contract between an insurer (Star Assurance Co. Ltd) and insured whereby in exchange for premium, the former promises to compensate the latter for suffering from specified potential future losses or damage.

Main categories of insurance

1. Life Assurance
2. Non-Life Assurance general business)

Basic principles of insurance

UTMOST GOOD FAITH – This is a duty upon the proposer to reveal all material facts about the proposed risk. A material fact is one which would influence the mind of a prudent underwriter in deciding whether to accept a risk or not and on what terms. Examples are the value of the subject matter, its usage and location. This principle also requires insurers to disclose all the major terms and conditions of the contract to the insured.

INSURABLE INTEREST - The insured must stand in some legally recognised relationship to the subject matter of insurance whereby he benefits from its safekeeping or is prejudiced by its loss.

SUBROGATION – If an insured recovers under his policy then the insurers assume legal rights and remedies against third parties. This prevents an insured from making a recovery from both his insurers and a third party. Subrogation therefore means that the insurers can pursue or seek recovery from the third party who caused the loss to the insured.

CONTRIBUTION – An insured cannot make profit from a loss by recovering from more than one insurer. Contribution therefore means that all insurers will contribute to pay the actual loss so that the insured does not benefit. This happens when the same loss or damage by the same insured peril, occurs on the same subject matter and on the same interest.

PRIXIMATE CAUSE – Since insurance policies are designed to pay for losses arising from specified perils, any claim payable must be as a direct result of the insured peril happening.



Insurance claim, just like any accident are inevitable. When it happens these steps should be followed;

Who can make a claim?

The policy holder, insured or the caretaker of the vehicle or the beneficiary.

What are the circumstances under which a claim maybe repudiated?

When the peril which caused the loss was not covered under the policy or when the loss was not covered by the policy terms and conditions.

Who is a beneficiary?

The person or entity who is paid the proceeds under the insurance policy.

Who is an Insured?

A person/institution in whose name the insurance policy is written.

Who is a Third Party?

A third party is any person or entity other than the Insured and Insurer who obtains benefits under an Insurance contract.

What is an Insurance Policy?

It is a legal document which specifies the details of the insurance contract. In it the type of policy, period of insurance, the insured, the extent of cover terms and conditions among others are specified clearly. It is an evidence of the insurance contract.

What is Indemnity?

It is the financial compensation that is adequate to put an insured in the same financial position after a loss as he/she was before the accident. Insurers in order to indemnify an insured may at their option pay cash, repair, replace or reinstate damaged property.

What is a Peril?

A contingency that gives rise to a loss e.g. fire, flood, earthquake etc.

Who needs insurance and When?

Everybody needs insurance. In all aspects of our daily life, at home, at work, on the street etc. we undertake risks. Insurance exists to cushion us against the financial burden that would arise should a mishap occur. Hence the need to take insurance to protect that financial loss at all material times.

What are the types of Insurances available?

Star Assurance Company Limited provides varied insurance products tailor-made to suit your need. Click here to find out more about our products.

How do I Select an Insurance cover?

Selecting an appropriate insurance cover for yourself, your property or business requires professional advice. This is so because there are various policies that provide cover in various ways. Let’s know your needs first so as to advice you appropriately.