Westgate Mall victims to miss out on compensation for lack of terror
cover Updated
Monday, September 30th 2013 at 23:48 GMT +3
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*By NICHOLAS WAITATHU*
Businesses that have not insured against
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>,
including those at the Westgate Mall, will have to bear with huge losses
and costs.
This is despite
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>cover
being one of the cheapest in the market. Insurance industry players
yesterday warned that those who lost properties and were not insured
against
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>will
mostly likely not be compensated.
Association of
Kenya<http://www.standardmedia.co.ke/?searchtext=Kenya&searchbutton=SEARCH>Insurers
Chief Executive Tom Gichuhi said the uptake of
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>cover
in the country, which is being offered by about 20 companies, is
still low.
This has led to huge loss of properties damaged in terrorist attacks. “In
the Westgate Mall incident, if vehicles and businesses were not insured
against
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>they
will not be compensated,” he said.
*Seek payment*
Gichuhi made the remarks yesterday during the opening of the third
insurance village at the Nairobi International Trade Fair grounds.
“Currently we have between 15 and 20 insurance companies offering
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>cover,”
he said. “However, not many consumers have embraced the product;
they are only rushing to seek payment when
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>attacks
their properties.”
He said demand for the cover is expected to go up after the Westgate
Shopping Mall attack. Two days after the incident at Westgate, clients
started calling underwriter offices reporting damage to their vehicles,
businesses and tools of work as well as to seek compensation.
But by yesterday, it emerged that most people may not be compensated from
the losses incurred. Underwriters will most likely apply the proximate
cause principle.
This means that if a car was insured against theft or fire, the owner may
not be compensated by his insurance company even if it got damaged through
an inferno while parked at the ill-fated mall.
This also applies if a car was stolen in the confusion arising from the
attack.
Insurance Regulatory Authority Chief Executive Officer and the Commissioner
of Insurance Sammy Makove said the demand for the
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>cover
is likely to go up.
This is as people realise the importance of widening their protection
cover. “We expect more uptake of
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>cover
in the near future. This will help them avoid incurring losses in
case their property is damaged in a terrorist attack as happened in the
Westgate incident,” said Makove.
*Changing dynamics*
Insurance industry captains say the
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>cover
ought to be embraced by more businesses owing to the changing
dynamics in the global markets.
UAP Managing Director James Wambugu said the price of the cover is small
compared to the total rate of the sum insured of the other products. “For
example, if a client is paying four per cent of previous premium for a
vehicle he or she needs to add 0.25 per cent as cost of the terrorist
cover. This makes it the cheapest product in the industry,” said Wambugu.
He said even individuals who have covers on various issues, for example,
personal accidents, can still widen the cover to embrace
terrorism<http://www.standardmedia.co.ke/?searchtext=terrorism&searchbutton=SEARCH>
.
Makove said the insurance industry has a low market penetration level of
3.1 per cent compared to the global benchmark of more 6 per cent.
However,
Kenya<http://www.standardmedia.co.ke/?searchtext=Kenya&searchbutton=SEARCH>is
doing better compared to the rest of East Africa. The regulator boss
called on industry players to simplify the language used for the products.
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