All you need to know about property insurance and why its important

Losses and risk are inevitable in human societies as one does not know what happens next. In order to guard against and reducing the effect of total loss came about insurance. Insurance is a pool of fund from people with common interest to protect themselves from adverse effect/loss. It has got to do with the exchange of uncertainty of loss with certainty.

Insurance is about cushioning the effect of loss. Its functions include risk transfer, contribution, confidence, stability, better resource allocation, risk management and shift of burden.

Insurance can be grouped into life assurance and general business (non-life). Life insurance is a contract between the insured and the insurer (insurance company) in which benefits are paid to the beneficiaries in the event of the death of the insured. Life insurance guarantees financial security/ continued income to the beneficiaries of the insured after his or her demise. Life insurance policies include term assurance, endowment plan, group life assurance, and annuity.

General business deals non-life to include fire, burglary, auto, bonds, money, marine, aviation, professional indemnity, property (buildings).  The major thrust of this article is the property insurance.

No matter how a building is well structured, it is vulnerable to fire, burglary and theft. In order to prevent total loss of property in the event of fire/ burglary, properties (buildings) must be insured against fire or burglary. In this respect, there is the householder/ house owner insurance policy.

The householder/house owner policy covers buildings and properties. This covers the house owner in terms of its building and the householders in terms of its properties in the building. This policy covers loss due to accidental damage, fire, theft and also has public liability extension.

If a person wants take up this policy, he/she will make a list of the items to be insured with its costs. The receipts of the items are required especially in the event of claims after which the insurer will make inspect or take a survey of the property to be insured.

The burglary insurance policy covers damage done to the insured property as a result of forceful entry /exit from the premises.

Rates for these policies are given by the insurance company subject to the rules and the guidelines of the National Insurance Commission (NAICOM).

Rates for these policy (fire, burglary, householder/ house owner) is given by the insurance subject to thes rules and guidelines of  NAICOM