Insurance is a form of risk management that protects you against losses in the case of an incident or accident. Insurance transfers the cost of that potential loss from you to the insurance company in exchange for monetary compensation.
In order to handle these losses, insurance companies invest the funds paid to them securely so that they are able to pay when they have a claim. An insurance claim is a formal request to an insurance company asking for a payment based on the terms of the insurance policy to cover the losses in the incident or accident. The insurance policy is a contract that details the terms and conditions in which the insurance company is obligated to pay.
Different Types of Insurance
Life Insurance
This is insurance is a protection against the loss of income that would result if the you passed away. The named beneficiary receives the proceeds and is thereby safeguarded from debt and financial hardship.
Car Insurance
A car insurance policy (also called an auto insurance policy) is a mandatory policy that is issued by an insurance company to safeguard against accidents on the road. The law in Kenya mandates that every car owner must have one of the following policies:
- Third Party Insurance: This means that you are able to cover damage to others as the result of an accident that was deemed your fault. Any damage to your own car is your own problem, and you have to cater for it out of your own pocket.
- Comprehensive Cover: This means that you can claim from your insurer for accidents that are deemed to be your fault and the insurer can help you pay for it.
Property/Home Owners Insurance
It is designed to protect an individual‘s home against damages to the house itself or to possessions in the home.
Personal Accident Insurance
It is an annual policy that provides compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events. It is designed to provide financial help in the event of the said injuries. It is different from health insurance and life insurance because it caters for:
- Accidental death
- Permanent disablement
- Temporary and partial disablement
- Medical expenses
- Corrective surgery
- Hospitalization benefits
- Funeral expenses
Medical and Health Insurance
This is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. This insurance usually includes:
- In-patient care: This refers to any medical service that requires admission into a hospital. It usually refers to serious ailments and traumas.
- Out-patient: This refers to any medical service provided that does not require a prolonged stay at a facility. This can include routine services such as checkups or visits to clinics.
Travel Insurance
This is an insurance policy that is usually limited the period of travel for you and your family. It usually includes:
- Personal accidents
- Medical related expenses
- Loss of travel and accommodation due to cancellation of the journey
- Losing your baggage, belongings and luggage
- Losing your passport
- Personal liability
- Delayed baggage
- Travel delays
- Hijacking
- Repatriation
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