Motor vehicle insurance in Kenya is essential for vehicle owners to protect against financial loss due to accidents, theft, or damage.
With various insurance options available, it’s crucial to understand the types of coverage, how insurance companies determine vehicle value and the mandatory requirements for different vehicles.
Types of motor vehicle insurance
Comprehensive insurance
Comprehensive insurance provides the most extensive coverage. It includes protection against:
- Accidental damage to the vehicle
- Theft
- Fire
- Vandalism
- Natural disasters (e.g., floods)
- Third-party liabilities
This type of policy is suitable for high-value vehicles or those seeking maximum coverage.
2. Third-party insurance
Third-party insurance is the minimum legal requirement for all vehicles in Kenya. It covers:
- Liability for injuries or deaths caused to third parties (drivers, passengers, or pedestrians)
- Property damage resulting from an accident
This insurance does not cover damage to the insured vehicle or its occupants. All vehicles must have third-party insurance as per the Traffic Act. This ensures compensation for damage or injury caused to others.
Failure to comply with this requirement can result in penalties, fines, or impoundment of the vehicle.
3. Third-party, fire, and theft insurance
This policy extends third-party insurance to include:
- Coverage for fire damage
- Theft of the insured vehicle
How insurance companies determine vehicle value
When evaluating the average cost of car insurance, it’s crucial to understand that the rates can differ significantly between insurance providers.
The total expense of comprehensive vehicle insurance is influenced by several factors:
- Vehicle age: Generally, older vehicles tend to attract higher insurance premiums. This is because older cars are perceived as having a higher risk of mechanical failure and less advanced safety features.
2. Make and model: The insurance cost can vary depending on the make and model of the vehicle. Rare or high-performance cars might incur higher premiums.
Additionally, vehicles with lower safety ratings or poor claims history for specific makes and models can lead to increased insurance costs.
3. Vehicle usage: Insurance rates are also affected by how the vehicle is used. For instance, whether it’s for personal use, commercial activities, or Public Service Vehicle (PSV) purposes can impact the premium.
4. Vehicle value: The insurance premium is generally higher for vehicles with a greater value. However, it’s worth noting that vehicles valued below Sh750,000 are also experiencing a notable increase in premiums.
Despite this, high-value cars might have a lower rate compared to their worth, reflecting the insurer’s risk assessment.
5. Claims history: Your claim history can affect your insurance premiums. Frequent claims within a policy period can lead to higher premiums.
Excessive claims might even result in the insurance company refusing to cover future claims or deciding not to renew the policy for the next term.
Insurance companies often use databases, industry guides, and expert appraisals to determine the appropriate value. Vehicle modifications or upgrades can also influence the valuation.
Insurance claims process
In the event of an accident, it is essential to follow the insurance company’s claims process, which typically involves reporting the incident, providing necessary documentation, and cooperating with investigations.
