LETTERS: Law on third party cover insurance is weak

Public service vehicles
Public service vehicles in Nyeri town. FILE PHOTO | NMG 

In the Kenya Gazette of November 14,1944, the Governor of the Colony and Protectorate of Kenya approved a bill to make provision against third party risks arising out of the use of motor vehicles. This Ordinance was cited as the Motor Vehicles Insurance (Third Party Risks) Ordinance, 1944.

Section 4 Subsection 1 of the Ordinance states, “Subject to the provisions of this Ordinance it shall not be lawful for any person to use, or to cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation to the user of the vehicle by that person or by that other person, as the case may be, such a policy of insurance or such security in respect of third party risks as complies with the requirement of this ordinance “.

That same Ordinance is now cited as the Insurance (Motor Vehicles Third Party Risks) Act Cap 405 in the laws of Kenya.

It is good to note that an owner of a vehicle needs to have security of the said vehicle on the road in form of insurance or other security approved by the minister as shown in the excerpt of the Act.

Section 6 subsection 2 states as follows, “ Whenever such a security is approved by the minister and deposited with him, the minister shall give to the owner of the vehicle concerned a certificate (hereinafter referred to as a certificate of security) in the prescribed form, subject to such fee and containing such particulars of any conditions subject to which the security is given as may be prescribed; and where the owner owns more than one vehicle in respect of which such a security has been approved, the minister shall issue a separate certificate of security or a copy of the original certificate in respect of each vehicle; and where the owner owns more than one vehicle in respect of which such a security has been approved, the minister shall issue a separate certificate of security or a copy of the original certificate in respect of each such vehicle”.


Having verified that all a person needs is security for the said vehicle on the road, then it becomes a contravention of the law when the police are instructed by National Council on the Administration of Justice (NCAJ) to arrest anyone without an insurance certificate because all one needs is some of security to have the car on the road.

Another issue to note is that some companies in this country do not honour claims, especially those companies doing a lot of passenger service insurance business (PSV) because these deal primarily with Third Party compensation claims.

Claimants can go for decades before they get compensation defeating the purpose of having an insurance cover in the first place. Wouldn’t it be better and faster if the claimants can claim directly from the owner of the vehicle?

Insurance by it’s very nature means that it stands in place of the insured should a calamity arise. Therefore when one get’s an accident or is sued because of any motor vehicle accident, he delivers the same to the insurance company who then take up the position of the insured.

But what happens, as is the case with some insurance companies in this country, when the insurance company cannot meet its financial obligations to the insured?

Then the insured is in hot soup because they will have to compensate the claimant from his own pocket then he can claim the same from the insurance company and who might never pay in the first place.

But that was not the intended purpose of taking up cover because in most cases the insured will not be in a position to compensate the claimant. Most people in this country have been auctioned because they trusted an entity to come for them in time of need but never did so.

There’s also another scenario whereby the insured needs compensation for their vehicle that has been involved in an accident and becomes a write-off. If the insuring company cannot compensate the insured’s vehicle, of what use then is the insurance cover taken up with these companies that do not meet their financial obligations?

What we have are companies minting money and playing with people’s lives even as the insurance regulator looks on. It is a high time that motor vehicle insurance was done differently or abolished all together and people made to carry their own cross, and given the option of whether to insure or not.

It doesn’t make sense to have motor insurance in this country. In any way, there are countries around the world that do not have compulsory insurance, how do they operate? Maybe it’s time some government brass went to benchmark in these countries.

Washington Ndegea, chairman, Bima Intermediaries Association of Kenya.