BY WINDE GANJAO
Kenyan motorists will from January 1, 2022 pay almost double for vehicle insurance after some underwriters increased their pricing for comprehensive cover.
Comprehensive car insurance policy covers damages to your own vehicle as well as third-party liability. The policy might be expensive as compared to third party insurance cover.
The sudden increase in the pricing for comprehensive insurance cover for private vehicle owners in Kenya will now go up by almost 50 percent.
The Insurance firms attribute the rise to increase in claims, some of them fraudulent – which has seen underwriters make tremendous losses running into billions.
“I have received a notification from my Insurer – Sanlam – notifying me that starting next year I will be paying Ksh72,324 from Ksh51,000 I used to pay, ” a client told the media.
Other Insurance companies which have already sent communications to their clients informing them of the new increased rates include ICA Lion and Metropolitan Cannon Insurance.
Insurance Regulatory Authority (IRA) has since the beginning of 2021 been pushing to have underwriters increase their premiums to cushion them from losses.
Insurance companies claim they have been making losses running into billions for the past 20 years – blaming the losses on fraudulent claims and price undercutting.
Data from IRA indicate that Insurance companies made over Sh1 billion in loss in 2020 alone.
Meanwhile, in an attempt to cushion themselves, Insurance companies may fail to cover vehicles with value below Sh500,000.
Understanding different types of vehicle insurance
Comprehensive vehicle insurance
This insurance cover is not a mandatory, but is the most preferred by Kenyans. It cover offers full protection to both parties in case of an accident. The cover offers financial security in case of a road accident or in case your car is stolen, damaged due to fire, riots, natural disasters like floods. It also offers third party benefits such as damages to other people’s properties like vehicle or buildings, injuries and death.
Third party insurance cover
Third-party insurance cover offers one the basic protection in the unfortunate event of an accident. This is a mandatory cover required by the traffic law as it covers damages, injury or death caused to the third party.
When your car is insured under a third party cover, it means that, if you get into an accident, the insurance company will only pay for damages to property such as buildings, the other car or injury to the other person and not to yourself or your car.