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Westgate: Car owners miss out on insurance

It will not be an easy journey in the next few months for shop owners and those who had parked cars at Westgate Mall, because, unfortunately, they will have to start from scratch.

Information gathered by NairobiNews paints a gloomy picture for people who have suffered business and property losses after the attack; they will not receive compensation from their insurance companies.

Many cars got destroyed in the explosions that rocked the mall on Tuesday as soldiers moved in to attempt to flush out the terrorists.

It is understood that failure by motorists and shop owners to take insurance on terrorism has  automatically locked them out of any compensation that could arise from the disaster as it is now common knowledge that the attack was an act of terror.

Terrorism cover cheaper

“Loss resulting from floods, typhoons, earthquakes, riots, sabotage, terrorism and political unrest is not covered by an ordinary comprehensive cover and it is unfortunate many people hardly go beyond it,” said Hesborne Okeyo, an insurance dealer.

According to him, consumers disregard terrorism covers and other political insurance options and take only comprehensive or the common third party policy.

Since early last year, insurance companies  began rolling out variants of terrorism covers to ride in tandem with other major insurance products after a series of grenade attacks rocked Nairobi city.

Unfortunately, not many consumers have been keen on the policies, mainly because of the assumption that the chance of their cars or businesses being hit by terrorists are slim.

Insurance experts believe the trend is likely to change after the Westgate Mall attack that saw more than 60 people die, hundreds injured, scores missing and property valued at hundreds of millions of shillings destroyed in looting or and the subsequent rescue mission.

“With this terror attack, it wouldn’t be surprising to see more people take up this cover,” said Africa Trade Insurance Agency chief executive George Otieno.

Terrorism cover is cheaper than mainstream products. For example, for a car valued at Sh1 million, the owner is required to submit only Sh2,400 per annum.

This is little compared to Sh45,000 yearly  remittances for the comprehensive third-party cover that most Kenyan motorists are familiar with.

While Westgate was insured by London-based Lloyd’s for Sh6.7 billion against political risk which does cover acts of terrorism, insurance experts say this does not include businesses that were operating in the mall.

Apart from the building, it is only selected shopping outlets like Deacons Kenya, Nakumatt, Creamy Inn, Baker’s Inn, Galito’s and Pizza Inn that will probably be compensated because of high likelihood of them being covered against political losses.