• By Raymond Momanyi

Insurance Jargon Explained

Insurance Jargon Explained: Deductibles, Premiums, Excess, and Co-Pay in Simple Swahili/English.

1. Introduction: The Claims Confusion

• The Hook: Start with a scenario most Kenyans can relate to. Imagine a mild car fender-bender (or a quick trip to the doctor). You're relieved you have insurance, but then you're hit with terms like 'Excess' or 'Co-Pay'. This causes confusion and frustration, leading to "claim shock."
• The Problem: Insurance language often feels deliberately complex, making clients feel lost and unsure of their real costs.
• The Goal: This guide will demystify the four key words that determine your out-of-pocket expenses when you make a claim. We will break them down using clear explanations and Swahili terms where helpful.

2. Premium: Malipo ya Bima (The Price of Protection)

• What it is: The fixed amount you pay regularly (monthly, quarterly, or annually) to keep your policy active. This is the basic cost of buying security.
• Key Insight: This is the most straightforward term. If you don't pay the Premium, your cover lapses, and you forfeit all benefits.
• Analogy: Think of the Premium as your monthly subscription fee for peace of mind.
• Why it Varies: Factors like your risk profile (age, health), the value of what you're insuring (car value, house size), and the breadth of the coverage you select all influence the final Premium amount.

3. Deductible: Kiasi Unacholipa Kwanza (Your Annual Contribution)

• What it is: A specified fixed amount you must pay out-of-pocket before the insurance company starts covering the costs for the policy year.
• Context in Kenya: This is most common in Health Insurance and some large Property policies.
• How it Works: Once your total medical bills for the year reach your Deductible amount, the insurer then begins to pay the remaining costs (subject to Co-pay, if any).
• The Trade-off: Choosing a Higher Deductible will almost always result in a Lower Premium. It's a risk management decision you make.
• Swahili Note: While often referred to in English, it signifies Kiasi Unacholipa Kwanza (The amount you pay first).

4. Excess: Kiasi cha Kwanza Kufidia Hasara (The Per-Claim Fee)

• What it is: A fixed amount or percentage of the claim that you, the policyholder, are responsible for paying per incident, regardless of fault.
• Context in Kenya: This is the most crucial term for Motor Vehicle Comprehensive Insurance.
• The Purpose: It prevents policyholders from making small, expensive-to-process claims (e.g., a tiny scratch) and encourages careful ownership.
• Important Kenyan Sub-Types:
  • Standard/Compulsory Excess: A fixed amount (e.g., KES 10,000) that applies to most accident claims.
  • Theft Excess: A significantly higher percentage (e.g., 10% of the sum insured) that applies specifically to total loss claims resulting from theft.
• Example: If your motor repair bill is KES 100,000 and your Excess is KES 15,000, the insurer pays KES 85,000, and you pay KES 15,000.

5. Co-Pay: Kiasi cha Ushirika (The Shared Visit Cost)

• What it is: A small, fixed flat-rate fee that you pay for specific services, even after you've met your annual Deductible.
• Context in Kenya: Used almost exclusively in Medical/Health Insurance for routine services.
• Common Use Cases: Paying a KES 500 Co-pay for a doctor's consultation or a KES 200 Co-pay for prescribed medicine.
• The Logic: It ensures that you have a small, immediate financial stake in the healthcare process, promoting judicious use of medical services.
• Swahili Note: You can explain it as Kiasi cha Ushirika (Shared Amount).

6. Conclusion: Empower Your Decisions (Call to Action)

• Empowerment: Knowing the difference between Premium, Deductible, Excess, and Co-Pay is the first step to becoming an empowered insurance consumer. This knowledge helps you choose the right policy and budget for claims.
• Next Step: Pull out your existing policy documents. Can you identify your Deductible, Excess, and Co-Pay?
• Need Clarification? If you're still confused or want to compare quotes from a trusted intermediary, Imana Insurance Agency Kenya Ltd is here to help. We simplify the jargon.
  • Call/WhatsApp: +254796209402 | +254745218460
  • Visit our Website to Compare and Buy: www.imana.co.ke or www.mykava.co.ke

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