Demystifying Insurance Contracts in Kenya: An Explanatory Approach

Abstract

If there is any subject globally that has been misunderstood, misinterpreted, misused, misjudged and misconceived, it is insurance and more so, insurance contracts. This paper attempts to demystify the subject of insurance in Kenya with special reference to insurance contracts. It not only highlights the difference between insurance and gambling, but also expounds the various types of insurable risks as well as breaking down and discussing the components of a valid insurance contract and the implications of breach of the same. The paper also touches on the basic principles of insurance universally recognized, including Utmost Good Faith (Uberrmae fides),Insurable interest, Proximate cause, Indemnity, Contribution and Subrogation, putting more emphasis on the fundamental principle of Uberrimae fides. The paper takes an explanatory approach to expound on the contract of insurance touching on offer and acceptance issues in detail, the proposal form and contents in various types of insurance, and finally explores the contentious issue of Material facts.

Keywords: Insurance contacts, Utmost good faith, insurable risks, proposal forms, life assurance, property insurance contra-proferentum rule.