Mada za sehemu hiiInsuranceMada 6
Insurance companies in East Africa offer mainly two classes of insurance, namely
- Life insurance (insurance of human life)
- General insurance (insurance of properties)
This covers insurance of properties. A person can insure any property he has an insurable interest e.g. fire insurance, accident insurance and marine insurance.
a. Accident insurance
This policy provides for compensation of actual loss. Accident insurance covers main categories
- Person accident
- Employers liability
- Motor accident
- Motor policies These provide for claims to be made for damage in partial or in total to a vehicle. This policy covers impact of fire and theft for private vehicle, commercial vehicle and motorcycle.
- Burglary policy insurance
- Is a policy which covers private house, house breaking and larceny (theft)
- This policy is issued to cover contents of private or business premises against breaking in and theft carried therein.
- Fidelity policy (fidelity guarantee)
- These policies provide compensation for the loss of money and goods embezzled by any employees.
- It may cover certain employees only or may cover the whole staff of the concern.
- Third party insurance It covers loss of the property of third parties or bodily injury to third parties i.e. drivers, passengers. Example if your car hits someone else as a result of your negligence. This insurance will make good loss to that person but not your car. It's compulsory to have third party insurance before a vehicle is allowed on the roads.
- Comprehensive policy Under this policy, the insurance company covers all possible types of risks. NB a motor policy may be third party or comprehensive.
- Industrial injuries This type of insurance covers compensation to employee suffering injury arising from the conduct of employment. e.g. if an employee is injured while performing his duties, the employer is liable to pay compensation to the employee.
- Bad debts insurance It covers loss that a businessman can sustain for the failure of the debtor to settle their dues.
- Personal accidents and sickness
These policies provide for compensation in the event of personal accident involving injury to the person and temporary or permanent disablement of some parts of the body. This covers the following:
- Personal accident only.
- Personal accident and specified diseases.
- Personal accident and any form of sickness for a specified term of a year.
b. Fire insurance
This insures property against fire and acts of God like flood, lightning, earthquake, riot, etc. Policies of fire insurance are classified as follows.
Kinds of fire policy
Specific policy
In this policy the insurer undertakes to indemnify the insured any loss or damage to property caused by fire up to a sum specified against that particular property in the policy.
Example
If the sum insured is 100,000/= in case of loss or damage to property the insurer is liable to compensate any loss up to the sum of 100,000/= depending on the extent of the damage. If the damage is 60,000/= this will be paid.
Valued policy
In this policy the insurer undertakes to pay the insured the amount of value of the property declared in the policy in event of total loss, the insurer will have to pay this amount quite independent of the market value of property at the time of loss.
- Reporting In case a loss or risk for which an insurance is covered by the policy occurs, the insured is required to report to the insurer within specified period of time.
- Filling in the claims form A claim form is issued by the insurer and the insured fills in the claim form, stating the full details of the loss.
- Assessing The insurer filters the report and sends out an assessor who surveys the extent of the damage and makes a report.
- Compensation The insured is compensated based on the report made by the assessor. The following circumstances may prevent an insured person or institution from being compensated:
- If he/she had defaulted on some of the premium.
- If the insured has intentionally instigated or caused the occurrence of the insured risk.
- If the loss suffered is not directly related to the insured risk.
Marine insurance policy covers insurance of ships and cargo or goods in ship except proximate cause arising from wear and tear, theft, pilferage and losses from rats and vermin. Marine insurance is divided into two sections.
- Marine hull - which deals only with the insurance of ships
- Marine cargo - this covers goods in ship or imports
Types of marine insurance
- Hull policy This policy covers the vessel itself or deals with the insurance of ships only.
- Cargo policy This policy covers goods carried by vessels (ships) only.
- Freight policy This policy covers the services offered in the vessel by the ship owner.
- Voyage policy Is the policy for specified voyage only e.g. from London to Dar es Salaam.
Is where a person insures his life. It is referred to as "assurance" because an event ensured against must occur either by maturity of the policy or death of the policy holder. Life assurance is an insurance against risk on a person's life.
Types of life assurance
- Whole life assurance
- This requires payment of premium through the life of the assured or for a specific period but the sum assured is payable only after the death of the life insured.
- Whole life assurance policy is paid only at the death of the assured.
- Endowment assurance Is for fixed term of years from the date of the policy and payable at that time or if death occurs before the lapse of the time.
- Education plan This plan is meant to benefit your children by agreeing that the insurance company will undertake payment of fixed sums at intervals over a given period. This benefit is available provided the assured child is still alive when the company's liability to pay for his education becomes due.
Insurance
Is a system of pooling risks together by contributing a small sum of money to a common pool from which compensation takes place to those who suffer losses.
Assurance
Is applied to these contracts which guarantee the payment of a certain sum on the happening of specified events which is bound to happen sooner or later e.g. death.
Risks that can be insured should fulfill the following conditions
- Loss must be foreseeable and subject to estimation of its value.
- The risk coverage must be spread over a large number of policy holders in order to average out the risk.
- The premium payable by insured must be within his ability to pay.
- The policy holders should be dispersed over a large geographical area.
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