Let’s imagine that you’ve bought million dollar worth of property in one of the prestigious suburbs in the coastal region. The beach house looks exquisite and promises a haven of financial returns when leased.
You may choose to live there, rent out, leave it vacant, or sell it. You’re sitting pretty, and so you may ask yourself, “Why do I need property insurance?”
Then, all of a sudden, floods happen and causes severe damage. Now you have to cover the entire cost of repairing the house, and this eats into your finances. If you’d had property insurance, it would have paid, in part or in whole, for your home to be fixed or replaced, securing your peace of mind and saving you extra costs.
To prevent such ugly scenarios, home buyers are normally told to purchase an insurance cover. The chairman of real estate event, the Kenya Homes Expo, says that a home buyer should sample the options of covers available to suit the climatic risks involved when purchasing property.
Daniel Ojijo, says that insurance companies have advanced in undertaking climatic assessments to cater to the various needs of a home owner.
“The basic goal behind buying any insurance is to make you financially whole following a loss. You pay a small certain fee to an insurance company today in exchange for a guarantee from the company that it will bear the burden of uncertain loss in the property which really is a win for you,” he says
Real estate assets are at increased risk of damage from extreme weather hazards due to climate change. Property owners, investors, insurers, and asset managers are tasked to understand how climate change will impact current and future vulnerabilities of physical assets.
Insurance companies take various measures to mitigate climate risks in the real estate industry. Some strategies implemented includes risk assessment and underwriting by investing in advanced data analytics. Insurers are adjusting their premiums based on the level of risk a property faces due to climate change. Properties located in high-risk areas may see higher premiums to account for the potential for increased damages.
Overall, insurance companies are proactively taking steps to mitigate climate risks in real estate by incorporating climate data into their risk assessment processes, promoting sustainable practices, and collaborating with stakeholders to develop effective strategies.
The Kenya Homes Expo provides a platform for aspiring home owner to sample the insurance solutions suitable for their regional areas. The event is on its 34th edition which is scheduled to happen at the KICC on October 19th-22nd.