Insurance– Insurance is a contract in which an insurance company promises to compensate an insured.
Agent – A person or a group of people selling insurance on behalf of an insurance company.
Insurer– Is the company which accepts risks after receiving premiums and pays claims.
Insured– The term ‘insured’ refers to the person who has taken insurance against various risks and who pays a premium for the insurance.
Broker -An independent professional person who is registered under the Insurance Act who advises customers on insurance. The broker operates as your agent, and not that of any insurance company. In Kenya, most Brokers are members of the Association of Insurance Brokers of Kenya (AIBK).
Underwriter-The person who decides how much to charge and who manages the account that bears the cost of claims for motor or household insurance, or the person who decides
Premium-The amount you pay to an insurance company, sometimes in regular installments or as per your agreement with the insurer for your insurance policy.
Commission-This is the money that is paid to agents or brokers who sell an insurance product on behalf of an insurance company. Commissions are paid by insurers
Excess-This is the amount the insured is expected to make when making a claim. This amount is usually specified in the policy. It discourages the insured from making very small claims and instead meeting this cost themselves.
Liability – Your responsibilities for the adverse effects of your actions, or lack of actions on others.
Third Party-Any other person who may be affected by your actions – for example, in a car accident, it would relate to damage to their car. In this context, it is well to recognize that the first party in an insurance policy is you, and the second is your insurance company and the third is the other person or vehicle in the accident.
Proposal– This is the application form which you have to fill in when you apply for insurance cover.
Sum insured-It relates to the value of goods at risk and this is the basis upon which the premium is calculated.
How can you purchase a general insurance policy?
You can choose to purchase a general insurance policy directly from a general insurance company or through an insurance broker or an insurance agent.
If you decide to purchase an insurance policy through an agent, before doing any business with an agent, you must be satisfied with the agent’s reputation and qualification.
All agents who sell insurance must pass the Certificate of Proficiency examination administered by the College of Insurance. Those agents who are undergoing training are required to have provisional certificates. The agents are all registered with the Insurance Regulatory Authority where you can check to verify.
Applying for insurance policy is a very straightforward matter. In summary, the process involves:
Completing a proposal form
Paying the premium
The insurance company will issue a policy document