02 Aug Third Party Car Insurance Kenya – File Claim, Cost & Benefits
Have you ever wondered what happens when someone is unable or unwilling to buy car insurance in Kenya? Well, they always have the option of getting a third party cover for their vehicles. This is the least cost cover you can find in the Kenyan car insurance market and is designed to provide vehicle owners with the minimum possible insurance needed to meet the legal requirement for car insurance in Kenya.
In some cases, the third party cover is actually the best cover for a vehicle if there is no chance of it being involved in an accident that would be better sorted under a comprehensive cover. Think about a vehicle driven in an institution, or one that is going to be in private storage for a period. The cover, as the name suggests, only takes care of third party liabilities that may arise during normal usage of the car.
What is Third Party Motor Insurance?
A third party motor insurance cover is a cover developed by Kenyan insurance companies to compensate third parties (people other than the owner of the car) whenever the vehicle insured is involved in an accident.
This cover protects the vehicle owner from any liabilities to third parties arising from incidents on the road. In simpler terms, the cover only takes care of the costs associated with damages your car causes to third parties and their property.
This differs from the other insurance types, which usually have benefits for the owner as well. The third party auto insurance is the third main insurance product sold by car insurance companies in kenya, with the other types of car insurance being the comprehensive car insurance cover, and the third party-fire and theft insurance cover.
The main difference between the third party cover and these other two covers is that the other policies provide protections for the car owners personally from risks arising from accidents. The third party covers only takes care of third parties.
Why buy a Third Party Car Insurance Policy?
Unlike what many people think, buying a third party insurance cover for your car is actually sensible under certain circumstances.
First, if you are having seasonal cash flow constrains and need a way to free up some money for business or personal expenses, you can opt for a third party cover.
In this case, you can free up in excess of Kshs 60,000 in premiums if your car is currently valued at Kshs 2,000,000. While this exposes you to certain risks, it nonetheless is an option if you need to have your car on the road as you sort your financial situation.
The second situation where a third party cover is ideal is when the vehicle you are insuring is driven within a strict area such as an institution or personal property. In this case, there may be little or no chance of the vehicle suffering damages from the risks protected using the comprehensive insurance policy.
The third situation where a third party motor insurance cover may be ideal is when your car is going to long term storage. In this case, you will still an insurance cover for it since it is illegal not to insure your car.
A third party motor insurance in Kenya will therefore provide you with the minimum insurance you need since the car will not be exposed to the risks where a comprehensive cover is desirable.
Difference Between Third Party Insurance & Comprehensive Insurance
Some of the differences between a third party insurance cover and a comprehensive insurance policy include the following.
First, third party policies are designed to protect other road users and members of the public, to the exclusion of the car owner.
Actually, the policy protects the car owner from external liabilities arising from accidents involving the insured car. In this case, any injuries or damage to other cars and property belonging to third parties get compensation. However the owner of the car does not.
Secondly, third party insurance usually costs much less than a comprehensive insurance policy.
A quick online comparison of the cost of insuring a Toyota Axio valued at Kshs 1,000,000, a Subaru legacy valued at Kshs 1,500,000 and a Mercedes Benz valued at Kshs 2,000,000 indicates that a third party cover is percent more affordable compared to a comprehensive cover
Table 1: Premium Savings when using Third Party Insurance as compared to the Comprehensive Insurance
|Third Party insurance
|Savings on Premiums
Data Source: www.insureafrika.com/car-insurance
The third difference between the third party insurance policy and the comprehensive insurance policy is that it is not possible to enhance the third party policy. The comprehensive insurance policy can be enhanced with elements like political violence and terrorism cover, windshield cover, among others. These options are not available for the third party policy
Benefits of the Third Party Insurance Policy in Kenya
In as much as the third party policy leaves the owner of the car personally exposed to losses that does not involve third parties, the policy still has some unique benefits that one needs to consider. The benefits of the third party insurance policy are as follows
First, the third party policy protects the policyholder from liabilities arising from damage to the property of third parties. This means that of the car insured is involved in an accident that causes damages to other people’s cars, buildings, or infrastructure, then the insurance company will pay for those damages.
The second benefit of the third party policy is that if the insured car is involved in an accident where a person is injured or killed, the policy will protect the car owner from the arising liabilities.
The third benefit associated with a third party policy is liabilities arising from passenger injury. When your passengers are injured due to an accident while inside the car, then they are eligible for compensation because of the third party cover.
How to File a Third Party Insurance Claim in Kenya
Filing a third party claim in Kenya follows the same procedure as filing any other car insurance claim, with one exception. All claims made against a third party policy are done to benefit third parties. The following steps apply when making a third party claim from your insurer.
Step 1. Report the incident to the police and to the insurance company
The first stage in the claims process is to report the incident resulting in the claim to the police and to the insurance company. The incident should be reported to the nearest police station, or have a policeman assess the incident and write an incident report. At the same time you are required to notify your insurer of the details of the incident.
As always, insurance companies prefer it if you do not admit liability, but allow for the determination of who is liable through a third party, in this case the police. The police will issue a police report/ a police abstract providing key details of the incident which can then form the basis for the claim.
Step 2. Fill a claim form
Once the details of the incident are reported, you will then need to fill and insurance claim form. The claim form requires you to provide details of the incident, the nature of the claim being made, the amount, and the intended beneficiaries. Your insurer will assess the documents, verify the facts and arrive at two decisions. First, the insurance company may decide to carry out further investigations into the incident if there is reason to suspect the claim may not be accurate. The second option will be to pay out the compensation if it is satisfied that the claim has been properly made and deserves compensation.
Step 3: Await Investigation
If the insurance company chose to investigate the claim further, they will send in a valuer if the case has to do with the value of the claim, or an investigator if their concern relates to the validity of the claim. In both cases, the investigator or valuer will examine all the facts and make a recommendation to the insurance company regarding whether the claim should be paid out, or how much the claim is worth. This step is necessary for the insurer to ascertain the accuracy of the claims made, and whether or not the claim should be honored.
Step 4: Witness the Compensation of the Third Party
The final step in the claims process for third party insurance is the payment of compensation to the person who suffered harm as a result of the incident involving your car. The insurance company, once it has dealt with all formalities relating to the claim, will notify the recipient of the amount of money it intends to pay, or the compensation it intends to offer for the damages.
If the beneficiary accepts the offer, the money will then be transferred to their bank account or their legal representative. The beneficiary, if not satisfied with the compensation offered may also decide to appeal, or to commence a legal process.
Cost of 3rd Party Insurance in Kenya
Unlike other classes of insurance where the value of the car matters in the calculation of premiums, the third party policy premium is independent of the value of the vehicle.
The cover is intended to protect the car owner from third party liabilities resulting from accidents. The value of these liabilities is independent of the value of the car. As such, insurance companies do not need to know what the value of your car is for them to provide a third party cover.
That said, the nature of use of the car will be a significant factor in the determination of the premiums you will pay for your third party insurance cover.
A 2010 Toyota Hilux valued at Kshs 1.5 million attracts a third party insurance quote of Kshs 7,574 if it is to be insured as a private vehicle, and Kshs 15,108 it if is insured as a commercial vehicle. This indicates that the amount you pay for your third party policy will depend on how you declare the usage of your car.
It is not advisable to insure your car as a private vehicle if you intend to use it for commercial purposes. Should any risk event occur, your cover may be null and void, and this will expose you personally to any third party claim made against you.
Also Read – The Pain Of Paying Car Insurance Premiums
How to Buy a Third Party Insurance Cover?
You can buy a third party car insurance Kenya online or offline. Offline insurance purchases in Kenya are still very popular. In this case, you can get insurance through an agent or a broker, or you can purchase the insurance directly through direct sales agents representing specific insurance companies.
When buying a third party auto insurance policy offline, you have to be careful to ensure you actually have a cover because unscrupulous brokers sometimes print an insurance certificate without actually submitting the premiums paid to the insurance companies. This can land you in a lot of trouble should an accident occur.
Buying insurance online is increasingly favored especially by younger buyers who understand and value the convenience technology offers. When buying insurance online, you will fill the proposal form online and will get a policy certificate sent to you by courier.
This method makes it possible for you to enjoy discounts since it gives you the opportunity to compare quotes from several car insurance companies based on your preferences. With the uptake of online services in Kenya, the number of Kenyans buying their insurance online is expected to grow rapidly in the coming years.