Friday, May 13, 2016

Understanding Motor Insurance

Motor Insurance covers you against loss or damage to your own vehicle due to accidental fire, theft, accident, third –party bodily injury or death, third party property loss or damage. Insurance of motor vehicles against third party risks is compulsory in Kenya and it is an offense for any person to use motor vehicle without the insurance cover.

Types of cover under motor insurance

Motor Third party - This cover protects you against third party losses including death, bodily injury and/or property damage.
Motor Third party Fire and Theft - This cover protects you against all third party risks mentioned above in addition to loss and/or damage to your vehicle due to theft and fire.
Motor Comprehensive - This protects you against the third party’s death, bodily injury and/or property damage as well as loss/ damage to your vehicle due to accidental fire, theft or an accident.

Who is a third party?


  • The first party in a motor insurance contract is you as the vehicle owner.
  • The second party is the insurer. 
  • The third party is a person who suffers property damage or loss or death or bodily injury as a result of an accident involving your motor vehicle. A third party may be any person including a property owner, a pedestrian, a driver or passengers in another vehicle.

Do's and Don'ts when applying for insurance

Do

  • Disclose all material facts on the risks to be covered.
  • Answer all the questions fully and accurately.
  • Complete and sign the proposal form yourself.
  • Establish the market value of your vehicle by having it valued preferably by a Motor Assessor.

Don't

  • Leave any question in the proposal form unanswered.
  • Withhold or misrepresent any material facts otherwise the certificate of insurance will be void and claim can be repudiated.
  • Underinsure, as you will be penalized by the application of Average in the event of a claim.
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