Flood risk – important changes to rating
Some of you will remember my article in October 2024, commenting on the imposition of new rating from 1st January, in particular in relation to the storm/flood rating and, in our view, harsh terms post the making of such a claim. See https://www.jwseagon.com/i-think-weve-been-here-before/
Well, the changes were postponed, but they are now due to take effect as from 1st April 2025 and below is the outcome of all these negotiations.
- Like Earthquake cover, you will now have to decide to opt in or opt out Flood cover. The applicable rate agreed in the market is 0.01%, so for every KES 10m of value, the extra premium to you will be KES 1,000.
- A compulsory excess/deductible (i.e. where you are responsible for the first amount) and this will be 10% of the loss amount subject to minimums as per the below table, and for Business Interruption, the excess will be 15 days.
| Sum Insured – KES | Excess – 10% minimum below |
| Up to 10,000,000 | 100,000 |
| 10,000,001 – 50,000,000 | 250,000 |
| 50,000,001 – 250,000,000 | 500,000 |
| Above 250,000,000 | 2,000,000 |
There are ongoing discussions about what the market plans to do about those who make claims, survey requirements, businesses or domestic properties within 10 meters of any waterway, but this information has not been agreed at this stage.
We regret to inform you of this situation. Non-compliance with these requirements may pose challenges for insurers, which could ultimately impact the policyholder.
Please get in touch if you have any questions, usual contacts.
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