Why insurance policy is only prohibitive until fire guts your property

The distress Isaac Kabogoza went through after his two-room house in Kisenyi, a Kampala suburb, was razed down in 2010 is still fresh. Kabogoza, a businessman at Owino market, recalls how his neighbours called at 3pm notifying him of a fire outbreak.

“It was hard to believe what was happening because I had left home when everything was fine,” Kabogoza says.

The cause of the fire is still unknown. It took Kabogoza three years to rebuild the house and replacement of household items. Like Kabogoza, many Ugandans continue to lose lives and property with no compensation, which leads to gross losses to the owners.

In developed countries, property insurance is compulsory for every house, thus giving owners a window in case of fire related calamities. However, the situation is different in Uganda, where few property owners insure their property.

According to Pamela Abonyo, the head corporate communications at National Insurance Corporation (NIC), property insurance is a contract that involves small periodic payments in return for protection against uncertainities and potentially severe losses.

However, Kabogoza, like many others, say buying insurance premium is expensive.

Insurers like NIC have a fire insurance policy which is suitable for the owner of the property in trust or commission; individuals/financial institutions that have financial interest in the property.

The policy includes all movable and immovable property located at a particular premise such as buildings, plant and machinery, furniture, fixtures, fittings and other contents, stock and stock in process along with goods held in trust or in commission including stocks at suppliers/customers’ premises, machinery temporarily removed from the premises for repairs can be removed.

Along with the basic coverage against loss or damage occupied by fire, the NIC Standard Fire and Special Perils policy provides protection from a host of other perils such as; lightning, explosion, riots, strike, malicious and terrorism damage, natural disasters such as hurricanes, earthquakes, floods, tornado and damage caused by sprinkler leakage.

The NIC householder insurance policy covers the insured’s building, fixtures, fittings, valuables as well as public liability benefits.