So you’ve built your dream house with a jacuzzi, gym and all the other trappings you had always dreamt of.
You have also gone out of your way to buy exclusive furniture to make it as comfortable as possible. Now, you can sit back and relax because you are set up for life, right?
Unfortunately, this is not the case as there is always a real risk that your home could be destroyed by a single calamity such as a fire, or a natural disaster such as a flood.
Then there are other risks like burglaries which, although they might not result in the type of loss one would incur in the case of a fire, still lead to financial stress because you will be forced to replace some, if not all, the stolen items.
Such incidents can happen to anyone and at any time, so it is advisable to guard against such situations since rebuilding from scratch or replacing stolen items is costly and could take a long time. This is where property insurance comes in.
According to Mr Dennis Koome, an account manager with AON Insurance, you can insure a variety of properties, including residential building, offices and warehouses, as well as the assets inside.
And the insurance covers them against losses arising from a variety of occurrences including those caused by natural calamities such as floods, fire, power surges that destroy electronic devices, and even human activities such as strikes, riots, vandalism, terrorism and burglary. In the case of burglary, you can insure against attempted theft, in which case a door or window is broken, but no theft actually takes place,” he says.
“Insurance companies have gone further even further and today insure against plumbing faults, as a leaking pipe can render the whole house unstable, making it uninhabitable since it can collapse on the inhabitants,” he adds.
He notes that while uptake of insurance for commercial buildings has been high because they contain a lot of insurable items, the uptake of insurance for residential houses and the items inside is growing.
“Kenya has a growing population with a lot of insurable items. Even though most of those who take home insurance cover are high- and middle-income earners, there are those living in smaller houses who have valuable items and are insuring them. There are people who do not have much to insure, but they value these items, even if they are worth just Sh100,000,” says Mr Koome.
This trend can be attributed in part to the fact that insurance firms have settled a lot of claims, so word has gone round on the importance of insuring property. Technological advancement, growth in real estate and a rising middle class with insurable property has also seen the uptake in home insurance grow to 70 per cent this year, says Mr Koome.
Mr and Mrs Karanja, who have benefited from home insurance, cannot overemphasise its importance. “We came home one Friday afternoon in August last year to find that all our electronic gadgets, clothes and travelling bags had been stolen, they recall. “The locks had not been forced open, so someone must have made a duplicate key, or they were burglars who used a master key,” says Mrs Karanja.
“Fortunately, we had already taken a home insurance cover, so we weren’t very overwhelmed since we knew the items would be replaced. And the cover we had taken enabled us to replace most of the items,” she says.
“I took a home insurance cover to enable me to have peace of mind and not have to worry about the safety of the things I have at home and movable property such as mobile phones and laptops,” says Mrs Karanja.
Kenyans should understand the items covered and how much is due to them. To do this, they should read the policy documents thoroughly to fully understand what domestic cover entails and the client’s rights as well as the responsibilities of the insurance company, Mrs Karanja suggests.
Many parents are also taking domestic covers to insure the electronic gadgets their children use in schools such as laptops and phones against theft, and even accidental damage. Living in university hostels and using public transport means there is a real risk that such items can get lost or stolen,” adds Mr Koome.
However, Mr and Mrs Peter Ng’etich were not as lucky because they had not insured any of the items in their home when burglars came calling one Saturday in February last year.
“When we arrived home, nothing seemed amiss – until we tried opening the door with the key and it opened a little too easily. Most of our easy-to-carry electronic items had been stolen. The thieves took my laptop as well as my wife’s, a tablet, the TV decoder, an old DVD player, some speakers from our home theatre, clothes, the microwave oven and even a water heater jug,” says Mr Ng’etich.
They also tried to unscrew the flat screen television from its stand to make it easier to carry, but might have run out of time or thought someone would find them, so they left it partly unscrewed and hanging precariously.
“The burglars left us really financially strained as we had to replace the two laptops immediately because we needed them for work,” he laments.
They also had to replace the decoder and repair the television, as well as buy new shoes and clothes.
“To say it was financially overwhelming for us is an understatement, since we had to ration a number of the things we use at home in order to save as much as we could. We also had to do without certain luxuries and entertainment that we were used to,” he adds.
Worse still, they could not save any money in March because replacing the stolen items had almost depleted their accounts, not to mention the debts they had here and there.
Says Mr Ng’etich ruefully: “Sometime before the incident, one of my friends who works with an insurance company had asked me to take a home insurance cover but since I was already servicing a health cover for my family and another for our daughter’s education, I didn’t see the immediate need. I took a cover so that I can have peace of mind. I also moved my family to a more secure estate with a gate that is manned 24 hours.”
There are more people taking home insurance to mitigate risks, or so that they can be “reinstated” to the position they were at before an incident, says Ms Noella Mutanda, the head of corporate communications, Insurance Regulatory Authority.
Although there are no minimum or maximum premium payments since different customers have different needs, with as little as Sh3,000 monthly premiums, you can have peace of mind knowing that even is your property is stolen, it will be easily replaced, says Mr Koome.
It is also notable that nowadays, both formal and informal developers are putting up structures with insurance in mind. Unlike in the past, we now see many informal developers taking insurance cover for their residential homes, he says.
Home insurance has become highly personalised to suit different customers’ needs since it is the owner of the property who decides what is valuable and worth insuring.
Mr Koome says that, contrary to popular belief, insurance firms to not insure electronics only, but also consider other items such as valuable furniture.
FURNISHING A HOUSE
“The cost of furnishing a house is very high, and having to replace furniture that has been stolen or damaged can be quite nerve-racking,” he says.
However, he notes, it is important for those who take home insurance to know that for them to be indemnified, they have to insure specific items.
“If a home owner or tenant buys a valuable item and does not insure it, it will not be included with the rest that have been covered by the policy. He or she has to include the new item in the policy,” Mr Koome explains.
It is also possible to swap an item for another of the same value, or alternatively, to pay a higher premium if the value of the item they wish to swap is higher than that of the one insured. For instance, you might have insured a single-door refrigerator and wish to swap it with a newer, double-door one.
You will just have to pay a higher premium for the double-door refrigerator for it to be covered, Mr Koome explains.
It is important for people to have peace of mind when going about their activities. Insurance makes it possible for them to do just that, he says.