MOTOR INSURANCE July 17 2017 Introduction Motor Insurance

MOTOR INSURANCE July 17, 2017

Introduction Motor Insurance is compulsory in Kenya. Motor insurance protects insured against financial loss in the event that the motor vehicle is involved in an accident, burnt or stolen. It also covers third party liabilities.

Scope of Cover There are three types of covers that can be issued to motor insurance: 1. Third Party Only (TPO) 2. Third party Fire and Theft (TPF & T) 3. Comprehensive

Third Party only TPO covers: • Third party Bodily Injuries • Third Party Property Damage arising out of use of the motor vehicle. Note: This is the minimum and compulsory motor insurance cover in Kenya (Cap 405)

Third Party Fire & Theft – (TPF&T) In addition to the TPO cover, the policy extends to cover: • Theft/malicious damage • Fire/special perils. e. g. Floods, wind, storm, falling trees, etc

Comprehensive Covers the vehicle against: • Third party liability –Injury & property damage • Fire/special perils • Theft/malicious damage • Accidental damage

Classes of Motor Insurance • • • Motor Private Motor Commercial – Own Goods Motor Commercial – General Cartage Motor Cycle(Non-PSV) Motor Trade (Road Risks) PSV – Private Hire (Chauffeur Driven) Tankers – Carrying Flammable Liquids Agricultural & Forestry Vehicles (Tractors, Harvesters) Special Vehicles (Cranes, Forklifts, Rollers, Excavators) Special Vehicles (Ambulances, Fire Fighters)

Standard Benefits/Limits under Motor Insurance • Windscreen – Kshs. 30, 000/ • Car Entertainment – Kshs. 30, 000/ • Third Party Property Damage Limit – Kshs. 5, 000/ • Passenger Legal Liability – Kshs. 3, 000/- person, Kshs. 20, 000/- per event • Medical Expenses – Kshs. 30, 000/ • Riot, Strike & Civil Commotion owing/Recovery Expenses – Kshs. 50, 000/- • Repair Authority – Kshs. 30, 000/-

Optional Benefits Under Motor Insurance Normally available at additional premium to enhance cover. • Loss of use/Car hire • Excess Protector • Personal effects/Loss of Keys • Passenger Legal Liability • Forced ATM withdrawal • Out of station accommodation • Terrorism, Sabotage & Political Risks • Extended Geographical Area outside Kenya– Comesa Extensive Cover • Road Rescue Services - INFAMA

Rating Motor rates are regulated by IRA and are based on claim experience. 1. Comprehensive – Based on a NCD structure - reward good drivers, punish errant ones – Gross rates are charged and discount earned for every claims free year – Minimum rates beyond which rates cannot dip – Fleets are accorded special discounts – 10 corporate, 3 individual – A minimum premium whatever the vehicle value – NCD letters/forms issued to clients changing insurers – Maximum Age of the vehicle

2. Third Party Fire & Theft A rate lower than Comprehensive rate is normally charged. Optional benefits don’t apply. 3. TPO • A minimum premium exists for specific class • No NCD applies.

Conditions & Clauses • Authorised Antitheft device e. g. Alarm, satellite tracking etc • Average Clause in case of under insurance • Compulsory Excess Endorsement • Market value Clause • Replacement parts Clause • Riots, Strikes & civil Commotion • Windscreen & window Glass Endorsement • War, civil war political risks and Terrorism Exclusion

Exclusions • • • Exclusions Consequential Loss Depreciation wear and tear, mechanical or Electrical Breakdown, failures or breakages Damage to tyres unless damage is caused to other parts of the motor vehicle at the same time The insured injuries and members of his/her household Claims arising out side the Geographical area – Kenya Wilful damage of the insured Motor vehicle

Motor Claim Process i. ii. Accident occurrence Report the Accident to the Police & insurer iii. Insured to document the claim and attach evidence i. e police abstract, driving licence iv. Vehicle taken to the Garage within the Panel v. Assessor send to assess the damage/Liability vi. Insured Advised on repairs and excess payable vii. Release letter issued by the insurer viii. Insured collects repaired vehicle and signs satisfaction note ix. Cost of repairs Documents send to the insurer

CLAIMS Process Accident Get Release Letter Pay Excess Refer to Police/Insurer Fill Claim Form

Thank you