What should I do in the event of an accident?

Ans: Inform the Company / the brokers as soon as reasonably possible ( for motor   claims within 48 hours verbally and 7 days in writing) and provide particulars of insurance in addition to

  1. Date of accident
  2. Place of accident
  3. Sketch map of the location of the accident site and
  4. Name and the Phone Number of the person to be contacted.

For what value should I insure?

Ans:In depends on the type of insurance and the properties to be insured. For   example, if you want to insure

  1. Motor Vehicles: The vehicles should be insured for the present market value ie. the price at which the vehicle can be sold in the market
  2. Buildings: The buildings can be insured either for the present Market value, (excluding the value of the land) or for Replacement cost. Replacement cost refers to the value of the building if new
  3. Machinery: The machinery can be insured for the present Market value, or for Replacement cost. Replacement cost refers to the value of a similar machinery if new.
  4. Stocks: The sum insured shall represent the maximum value of stocks in a particular place at any one point of time during the period proposed for insurance. Stocks shall be insured on the market value basis. If it is a seasonal business, then the same can be insured subject to “declaration basis”.Under the declaration policy, the value of stocks held shall be declared on monthly basis, and at the end of the year, the average value is arrived at and the premium is adjusted accordingly, subject to certain conditions
  5. Office Equipments:The office equipments can be insured either on market value or for Replacement cost. Replacement cost refers to the value of a similar equipment if new.

 

When should I decide about Market value or Reinstatement Value?

Ans: At the time of taking insurance cover.

What will happen if I insure for a lower amount than the actual value?

Ans: If the sum insured is less than the market value at the time of loss, then condition of average will apply.

What is Condition of Average?

Ans: If at the time of loss, the sum insured is less than the market value, the claim amount payable shall be reduced proportionately as the sum insured bears to the market value

How to protect the increase in the value of Buildings?

 Ans: You can take the policy subject to Escalation clause subject to payment of additional premium


What do you mean by Escalation Clause?

Ans: The sum insured increases on daily basis upto the maximum percentage at the   end of the year. For example if the policy is subject to 10% escalation clause and   the the total sum insured is Tshs.365 million, then the sum insured is deemed to be increased by 100,000 every day. If accident takes place on the 10th day of taking out the policy, the sum insured is deemed to stand at Tshs.365 million + Tshs. 1m (@100,000 for 10 days)