Insurable and Non- Insurable Risk Exposures and the Related Coping Strategies: A Case Study of Select Urban Households of Iluababor Zone, Oromia Regional State, Ethiopia

Abstract

The study entitled "Insurable and non- insurable risk exposures and the related coping strategies; A case study of select urban households of Iluababor Zone, Oromia Regional State, Ethiopia" was conducted with the general objective of identifying the insurable and non insurable risk exposures facing the households in the study area and finding the coping strategies applied. In order to achieve this objective, the study was conducted using descriptive research design since identification can better be achieved using survey. The population of the study was urban households in Mettu and Bedelle Towns of Ilubabor Zone. A proportionate area sampling method was applied in selecting samples because it reduces the sampling error and provides greater or better precision. Random sampling technique has been applied at household level selection. The list of heads of households was obtained from administrative authorities. From the total population of 901, about 384 (42.6%) were randomly selected by using table of random numbers. The study has utilized both primary and secondary data. The investigation reveals that the most important risk exposures facing the study area relates to food expenses, house construction expenses, medical expenses, theft and education expenses. Death related costs, flood and fire risk seems to be remote in occurrences. However, food expenses, education expenses and house construction expenses cannot be taken as risks from the insurance point of view since they are predictable, not accidental. As coping strategies, using money of self out of one's savings, receiving help from friends and relatives in cash or in kind, selling of valuable assets, 'ikub' (traditional saving and credit groups) and 'iddir' (traditional funeral societies) have been identified as cultural coping mechanisms.