Taking lifestyle protection a notch higher

As more affluent Kenyans splurge out on sleek vehicles, antique collectibles and designer bodies trimmed to perfection, the insurance industry has found a new luxury market.

In the past, insurance policies limited coverage to catastrophic plans, but Porsche, Bentley, Range Rover owners are insuring their fancy wheels, lights and wood panelling separately. So are the men at the peak of sartorial elegance, who are insuring their hand-stitched bespoke Italian suits.

Expensive phones, designer watches, million-shilling worth home appliances, sunglasses, jewellery, handbags and collectibles such as antique artworks are also being covered against damage or theft.

“All my suits are insured against theft or damage. I have also insured a client’s suit worth Sh200,000 and another customer has insured household items worth Sh50 million,” said Karani Kinyua, the chief executive of Covernet Insurance Agency.

As the market transforms, more insurers are relaxing the rules, pushing up the cap.

“Virtually anything can be insured. The question is, are you ready to pay premiums?” said Mr Kinyua, adding that human body parts are not commonly covered against risks in Kenya yet as seen in the US where the likes of David Beckham have insured their legs for millions. Musician Miley Cyrus, has also insured her best asset, her tongue, for Sh100 million.

In general, you will have to pay higher premiums for these lifestyle products than you would for traditional ones. So what do you need to know before insuring your car seats, watches, TVs or the meticulously tailored Brioni suit? There are different products in this market.

Domestic package policy

Most of these products fall under this package categorized into three segments, namely; household content, building and servants.

Household items such as electronics, utensils, clothes, furniture, expensive jewellery fall under this category.

Mr Kinyua advises against insuring specific items in the homes such as TVs, saying the domestic package policy ensures one is compensated for all household items incase of burglary, fire or floods.

Insuring one item may end up to be costly. In case a client claims that their property was destroyed due to flooding, then it has to be ascertained if the situation was caused by rain, tap water, burst tanks or ill intentions.

“Some people go to extremes when they are in dire financial need to torch down their houses or let tap water run so that they can be compensated,” he said.

Most of those who take up this specific product under the domestic package are those who live in rentals. Home owners tend to favour insuring their building and all its content, including servants as one product.

It is advised to go for this product as it saves you the trouble of spending money in case a servant is involved in an accident while at work.

Old customers

For years, retirees have been locked out of medical insurance.

It is estimated that 60 per cent of medical bills occur after retirement because the aged are more vulnerable to diseases. The most affected are those over 80 years of age. But not all old Kenyans are poor.

Isaac Ngaru, an insurance consultant said insurers do not lock the aged out of medical schemes willingly.

“Insurers would want to compensate a few claims and having more retirees or those over 75 years increases risks as companies would not have enough money to compensate the remaining groups in case of deaths,” said Mr Ngaru.

He said that insurers are now becoming more innovative and responsive to needs and some are braving the less travelled road to provide a scheme that would cover retirees or ageing parents to avoid desperation in sunset years.

“Jubilee and APA Insurance, for instance, have revised age limits to cover all —though the more the years the more the premium one pays to cover risks,’’ he said.

Mr Kinyua said that seniors can be insured comfortably provided they join before the age of 65 and 80 years.
Financial service providers like Alexander Forbes, for instance, offer medical insurance dubbed ‘Ngao Milele’ to retirees.

This allows employees below 60 years to save towards a medical cover that will start when they retire. The firm withdraws money from the accumulated contribution when need arises to pay monthly premiums to underwriters who sign the target individuals for this product.

‘Ngao Milele’ creates room for a group of five to pool funds to contribute to the medical cover for both in-patient and out-patient treatment.

Mr Ngaru advises people to go for umbrella covers as they enjoy better discounts and more flexible terms such as admission of pre-existing conditions and contract workers can also go for this cover.

But even when this happens in the open market, the National Health Insurance Fund (NHIF) continues to cover an individual for a lifetime.

But for those who are not NHIF members other options exist where funds can be pooled to cater for premiums monthly or annually.

Depending on the company and number of kin covered, the minimum limit cover is about Sh500,000. This can go beyond Sh10 million for a maximum limit cover.

One can pay premium between Sh90,000 and Sh500,000 annually for this comprehensive cover.

“A comprehensive cover of Sh5 million maximum limit includes air evacuation services,” said Mr Kinyua.

Banks also finance the annual payments to the insurer reducing a client’s financial burden but one is required to pay back in instalments within 10 months. An interest of eight per cent is charged.

In cases of chronic diseases like cancer and kidney ailments , a client has to have a record of treatment for a particular period of time before compensation is done.

Car insurance

For a long time, Kenyans have been insuring their vehicles alone and third parties, but now added benefits such personal accidents covers are attracting more customers. Personal accident cover compensates the owner of the car incase of an accident.

Tyre insurance

Tyre insurance is also gaining popularity. APA Insurance, for instance, offers XtraSure Tyre Damage Guarantee, the product protects owners from paying for any unwarranted repairs or replacement of damaged tyres.

This product covers tyres against damage from rocks, broken glass, nails, kerbs and potholes.

“Whatever happens to them, your fault or not, we fix or replace them,” said Sandeep Shah, AutoXpress managing director.

Mr Shah said that the package is free of charge for the first year and thereafter one pays a charge of three per cent of the initial purchase price of the tyres.

Lady Auto product

This product gives women motorists special benefits as they are considered safe drivers. CIC Group, for instance, recently launched the CIC Lady Auto product which insures the driver’s personal property in case they are destroyed or stolen while in the underwritten car.

This includes items like a handbag and its content, mobile devices, car keys. A handbag and its content are covered at a cost of Sh10,000 per annum.

The nuclear family is also covered while travelling in the same car and the driver enjoys Sh20,000 for trauma counselling after an accident.

There is also reimbursement of medical expenses incurred by third party of up to Sh50,000.

In case of a car breakdown or an accident, towing services are provided regardless of the location.

Travel insurance

This product covers you through your journey, delay of flight, hand luggage or cargo and any other thing you are travelling with in case they get lost.

It caters for all travel delay costs whether by road, air or water.

Mr Githongo said that it applies for trips locally and abroad.

“I just processed papers for someone who intends to travel to Sweden and is covered with UAP,” he said.

Phone and tablet insurance policy

The upsurge in smartphone users has also pushed the industry to develop new products.

High-end phones or tablets mostly, Apple, Blackberry, HTC, LG, Samsung, Alcatel, Sony are the commonly insured brands. They are protected against theft, accidental damage or loss.

The phone should not be more than two years old.

To avoid ‘fraudulent claims’ one is limited to insure two items in a year.

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