Why ICEA Lion is Leading the Way in East African Insurance: 2024 Review
30 Jul, 2024
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How Motor Insurance Works to Protect Your Vehicle and Your Wallet
How Motor Insurance Works to Protect Your Vehicle and Your Wallet
Video Source: AKI YouTube
Motor insurance is not just a legal requirement; it’s a shield for your vehicle and your finances. This post will look into motor insurance policy, explaining its features, advantages, and how it provides strong protection for your vehicle and your wallet.
Understanding Motor Insurance
Motor insurance policy is a financial product designed to provide coverage for vehicle damage, theft, and third-party liabilities. By selecting the right policy, you not only comply with legal mandates but also ensure that your investment in your vehicle is protected against unforeseen events that might set you back financially if you don’t have the policy.
Types of Insurance: Third-Party vs. Comprehensive
When it comes to motor insurance in Kenya, you have two main options: third-party insurance and comprehensive insurance.
1. Third-Party Insurance
This type of insurance covers damages to others, including their vehicles and persons, in the event of an accident. However, it’s important to note that third-party insurance doesn’t extend coverage to you or your vehicle.
In Kenya most TPO policies will cover a damage of up to Kes 3,000,000 /=. If you ever cause an accident without an insurance cover, you’re personally liable to pay for the damage inflicted to others, having the cover will protect you from such a scenario.
TPO (Third Party) policies are generally cheaper than comprehensive covers for obvious reasons. TPO cover premiums are usually fixed prices that change from time to time depending on the insurance company.
2. Comprehensive Insurance
For more extensive coverage, comprehensive insurance is the way to go. Not only does it protect third parties, but it also covers damages to your vehicle. Whether it’s theft, fire, or accidents, comprehensive insurance has you covered.
In most cases, the premium payable for comprehensive covers in Kenya is determined by the value of your car. Let me give you an example: At the time of publishing this post, the average industry rate for private car comprehensive cover is 4.5%. If your vehicle is valued at Kes 1,000,000/=, you’re supposed to pay a premium of Kes 45,000/= plus any extensions you’d want and levies such as VAT.
To make sure that you pay a fair premium, all insurance companies in Kenya will do a comprehensive vehicle valuation to determine the current value of your vehicle. The valuation is not done by the insurance companies but by a panel of trusted valuers across the country to ensure there is no conflict of interest and a nation wide of their services.
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Protecting Yourself: Personal Accident Insurance
While motor insurance covers your vehicle, it’s crucial to remember that it doesn’t extend coverage to you as the driver. That’s where Personal Accident Insurance comes in. Whether you opt for it as an add-on to your motor insurance or as a separate policy, Personal Accident Insurance ensures that you’re financially protected in case of injuries sustained in an accident.
Understanding Your Policy: The Importance of Documentation
While the insurance sticker on your vehicle serves as proof of insurance, it’s crucial to delve deeper into your motor insurance policy. Your policy bears the details of your coverage, including terms, conditions, and exclusions. Take the time to read and understand your policy to ensure you’re fully protected on the road.
Going Digital: Verifying Your Insurance Certificate
In today’s digital age, motor insurance has embraced technology. Since around 2020, the Association of Kenya Insurers shifted the issuing of motor vehicle insurance to the DMVIC system. When you receive your insurance certificate online, don’t forget to verify its authenticity. Ensuring that your insurance certificate is valid and up-to-date is essential for peace of mind on your journeys.
Verifying the validity of an insurance cover is a simple process and it’s always included at the lower part of the insurance cover copy sent to you.
Conclusion
Embarking on Kenya’s roads goes hand in hand with the responsibility of motor insurance. Whether opting for the simplicity of third-party coverage or the comprehensive protection of your vehicle, the key lies in informed decision-making. Personal Accident Insurance adds an extra layer of security, emphasizing the importance of driver well-being.
