Insurers face high claims on flood damage

Insurers face massive claims in the wake of prolonged rains, industry brokers have warned, citing spread of floods to non-traditional areas.

The Association of Insurance Brokers of Kenya (AIBK) said poor early warning system has left the industry exposed, prompting it to set up a help desk at its secretariat to advise property and home-owners on claims procedures.

Heavy rains have been pounding the country in the last two months, killing at least 31 people and sweeping away property across the country.

“We expect more than 30 per cent of flood claims to come from properties outside the perceived high risk flood zones,” said AIBK chairman Nelson Omolo.

“We are also encouraging the public to contact registered insurance brokers for free advice on information required to take insurance policy against flood claims.”

With Kenya’s insurance penetration still hovering below three per cent – against global average of six per cent - typical property policies do not cover flood damage.

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Unpredictability

Mr Omolo said the unpredictability of the weather patterns has proved that all property are exposed to flood risk regardless of location.

“Property owners need to incorporate flood damage in their current policies through an endorsement as this takes minimal or no additional premium, depending on the portfolio in question,” he said.

He advised home mortgage lenders to start insisting on flood damage as a rider to the property policy and make it a condition for accessing the loans.

Government agencies should monitor and provide early warning to the public ahead of such disasters to mitigate the full impact of such natural hazards, the association said.

This kind of collaborative effort, they added, will scale down the magnitude of damage to property and loss of life contrary to what is being witnessed across the country at the moment.