Home Risk Management Help Desk FAQs

In the event of a loss, what am I covered against?

This normally depends on the specific policy.  Non-motor policies usually cover perils like fire, lightning, thunderbolt, subterranean fire, explosives, non political riot strike and malicious damage, storm, tempest flood excluding loss or damage caused by subsidence or landslip, earthquake excluding loss or damage (other than loss or damage by fire) arising directly or indirectly from any mining operations, impact by road vehicles and animals, theft or any attempt thereat of fixtures and fittings in or on the buildings, accidental falling trees or branches, bursting or overflowing of water tanks, apparatus but excluding damage to the installation itself etc.

Generally, the scope of cover depend on the specific policy required, thus it is vital for the insured or proposed insured to clarify this with the underwriter or alternatively to scrutinize the policy document itself.

When do I become covered?

As soon as the proposal is accepted by the underwriter and immediately after paying the full premium or the first premium whichever is applicable.

How did you compute the premium you are charging us?

The rating are usually set up by the individual company but it has to be noted that normally the Insurance Council of Zimbabwe sets up minimum premiums to be charged industry wide. Apart from that it is the prerogative of the underwriter to scrutinize each and every proposal brought to him and come up with a premium equitable to the size being transferred to him. The underwriter will therefore consider many factors amongst them the following : security features, the likelihood of the fire risk , location, proximity to fire hazard, age, moral hazard, sum insured or value etc. These help the underwriter in computing the premium.

What are the incentives if (a) I have security features on my property? (b) I do not suffer any loss or damage to my property during any one period of insurance?

(a) Normally a discount is offered if certain security features are required by the underwriters are in place.  For example under our home combined policies, we offer a discount for alarm systems linked to Rapid Response Units (i.e on contents or household cover only).
(b) If the insured does not claim in any one period of insurance, he/she is entitled to a no claims discount which discount is increased with successive claim free insurance periods of insurance eg 1st year 10% and 2nd year 20% etc.

How do you cater for inflation once my policy is in force?

(a) Normally we strongly advise our clients to periodically revalue their property say quarterly.
(b) We have set valuation centres where our clients can have vehicles valued at no cost. 
(c) We inflate the sums insured on renewal by a certain percentage which percentage we deem to be reflective of the inflation rate, however the best solution is 7.4.5 (a) above.

What is the purpose of the excess you charge us?

Basically an excess is the amount or that portion payable by the insured him/herself in the event of a loss. Strictly speaking it is the first amount payable by the insured in the event of a claim. For the purposes of insurance, both definitions are acceptable.
The purpose of the excess is to make the insured participate on his own loss. This is deemed to be an incentive for good risk management by the insured.

What is the purpose of the average condition?

Basically discourages underinsurance. This results in the insurer insuring his property to the actual value of the property and by he same token, the insurer also collects the premium equitable to the risk being transferred to him. In other words, the average condition creates a win -win situation.

Why should I insure? What are the benefits of insuring?

The benefits of insurance are infinity, however can be summed up as follows:-
(a) peace of mind
(b) financial security