So far, we’ve covered health, life, and academic insurance. This week, we take a look at property insurance and what it means to have such a scheme.

According to Kenya Re’s Kenya Insurance report for the first quarter of 2012, housing packages accounted for 785 million out of a total of 43.1 billion non-life premiums in 2009. This means that, at the time, domestic property insurance represented about 1.8% of all premiums in the non-life sector. Kenya Re projects that in 2012, non-life premiums will have hit KES 68.04 billion. They have not yet released estimates for private property premiums.

How does it Work?

Property insurance is not as simple as it sounds. There are a number of factors involved long before anyone can apply for a policy. You need enough money to cover the structure of your home. This varies depending on the house’s value. You also need enough money to cover your personal possessions and third parties that may be injured within your premises.

After you've met the necessary requirements, the insurance company determines the amount you will pay annually using a premium calculator.

How Much does it Cost?

You need to note that, like most other packages, private property insurance requires higher premiums for better cover schemes. Basic covers cater for accidents and natural disasters. Unforeseeable incidents require the policy holder to pay higher premiums. What’s more, premiums depend on the location of the structure; the more secure the location, the less premiums you pay.

According to CIC Insurance’s premium calculator, a KES 10 million maisonette in Lavington or Kilimani costs KES 12,600 a year to insure (personal belongings not included). On the other hand, a similar structure in Kawangware costs KES 22,600 while one in Embakasi costs about KES 20,100.

APA insures private property against natural causes like earthquakes, storms and lightening. It also covers riots, strikes, malicious damage, explosions caused by gas cylinders, water damage caused by plumbing systems and impact by both vehicles and animals. Extra cover for other items is based on their value. The percentage of cover for personal items is determined by the insurance company’s underwriters. The Dawit Insurance Agency promises returns of 5% of the sum insured for damaged or stolen goods

How do you receive Your Claims?

The insurer usually has a list of items covered under the scheme of the policy holder. Some items may be lost or stolen that were not part of this list. As such, there are procedural guidelines that must be followed. The first thing a policy holder needs is a list of the stolen or damaged items and their estimated value. The second thing required is a filled proposal form for the claims made to the insurer. Lastly, the insurance needs full disclosure on whether or not the items posed a security risk in the first place. This will enable the company’s underwriter to determine the validity of the claim.

If the claim is valid, the insurance company will match the expense of the losses and compensate the policy holder according to their deductible rate.

Claim conditions also insist on alerting the insurer and the local police immediately a theft has occurred. The insured party must also take precautions to avoid such events. If the underwriter discovers that the insured party was careless in any particular situation, the claims could be dismissed as irrelevant.

Below is a table of some of the companies that offer private property insurance along with their package deals: