The cost of living in Kenya has seen a drastic increase in the past year that may spill over to the first quarter or half of 2018. Factors such as increased cost of oil and the rise of the US dollar have had a direct impact on the upward trend in the cost of living.
Such factors directly affect a majority of costs including the price of food, land, property and much more. The elections last year made things harder for businesses and trade in general which directly affected the circulation of money within our economy.
More Kenyans have had to dig deeper and deeper into their pockets just to make ends meet. The government has made efforts to try to cushion Kenyans from the high cost of living following the Price Control (Essential Goods) Bill signed into law by former President Mwai Kibaki in 2011 to cushion citizens from high cost of living.
Last year, and perhaps closest to our hearts, the government introduced subsidised maize flour placing Kenya’s most loved meal within reach of every Kenyan.
The government has also slightly reduced payroll taxes that took effect in the beginning of January. Pay-As-You-Earn (PAYE) bands will be expanded by 10 per cent as promised in last year’s budget. Taxpayers’ monthly relief will also see an increase in a bid to yield monthly savings depending on a person’s salary.
Nairobi is the 75th most expensive city to live in the world and with this in mind every single asset and item owned and bought is extremely valuable.
On average, Kenyans spend about Sh130,000 on furnishing their households. Most Kenyans live in estates that do not have proper security. Furthermore they are paying rent or a mortgage for their homes, but do not consider any form of insurance to protect anything within their household leave alone the home itself.
The high cost of living has seen more people ignore home insurance as it’s seen as an extra cost in this harsh economic times.
But how much do you really lose in the event of an unexpected event such as a fire in your home, theft or damage of property as compared to the cost of paying for a home insurance premium?
Say one day you find that your home has been robbed and almost everything carted away, which is a very common scenario in many estates in Nairobi; how big will your loss be? How expensive will it actually be to replace all you have lost?
Insurance measures come into play to save you at such moments; the burden of replacing all your stolen items will be the responsibility of your insurer instead of you as an individual.
The appropriate steps must however be followed in order to legitimately make your claim.
It’s very simple to claim your home insurance. All you need to do is follow four steps. Notify your nearest police station for all losses; notify your insure of the claim and submit the relevant documents; await the insurer to process the claim; and finally the claims are paid within seven days of signing discharge voucher.
The cost of insurance is dependent on the value of your property and for home insurance its dependent on the value of items within your house that are covered by your insurance cover.
The common worry is the lump sum cost of the insurance premium. However what very few Kenyans are aware of is that home insurance can be broken down into monthly installments.
With monthly instalment payments, customers are able to enjoy lower monthly costs that ensure protection of their valued items throughout the year.
According to the Insurance Information Institute 95 per cent of homeowners in the United States of America have home insurance this is due to the high level of awareness on the importance of home insurance.
Fifty-one per cent of them are under the age of 30 and take protective measures to ensure they safeguard their homes and assets within their homes.
Kenya has not gotten to this level of awareness, it is a goal that we must work towards. The uptake of insurance will increase when Kenyans are given proper knowledge on home insurance to enable them to make informed decisions.
Peter Nduati is CEO, Resolution Insurance.