International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue VII, July 2022 | ISSN 2454–6186
The determinants of household insurance product in Zimbabwe.
Chitombo Ezekiel and Kosmas Njanike
Bindura University of Science Education, Zimbabwe
Abstract: Noticeable challenges experienced by house owners to restore their property and belongings to original position in the event of theft and fire outbreaks results in the need to have household insurance cover. Household insurance relieves stress and brings peace of mind to the house owner as the fear of risk of future uncertainty is reduced. The study investigates the determinants of household insurance uptake in Zimbabwe.The study used data from finscope Survey 2014 to explore the determinants of household insurance in Zimbabwe. The logit model was used to estimate the determinants of household insurance. .The study found out that education, income .financial advice, age and location positively affects the uptake of household insurance. Marital status and social media have a negative relationship. Household insurance can be at the same level of uptake with motor vehicle insurance if the public are advised on the importance to safe guard their homes. Government and insurers must provide a conducive environment and campaign programmes to increase the awareness of household insurance. This untapped potential market will boost the revenue base for the insurance sector .There is need to consider household insurance pricing in the future.
Keywords: Household Insurance, House Owner, Determinants, Risk, Zimbabwe
I. INTRODUCTION
The purpose of this study is to find out the determinants of household insurance uptake in Zimbabwe. Construction of a home is seen as a financial investment for the future generation. This investment need to be guarded against risk which is the exposure to uncertainty (Holton , 2004) . Through taking insurance one can avoid sleepless nights of what could happen to his household property. The guarantee for safety and security against a possible loss in a particular event leads to the needs of insurance. Insurance which is the compensation for the losses due to damages in return for a premium paid (Gitau, 2013). Household property are subjected to losses due to unforeseen and unprepared events like fire and theft which results in unbearable loss to the property owner. Since the property owner will not be prepared for this eventuality majority of the affected won’t be able to restore the lost property.
The eventuality might happen when one has reached retirement age and or not actively working which results in financial burden to rebuild the destroyed property and psychological effects. The stress which comes after the property is destroyed by not limited to fire and winds results in many causes of premature death to the affected party in Zimbabwe. Property owner therefore takes insurance in order to manage and alleviate the risk of loss (lee and Vaughan,