A Comprehensive Guide to Car Insurance in Kenya

An insurance cover is one of the most significant considerations you will make when you import a car or buy one locally. Car insurance is a legal requirement mandated by Chapter 405 of the Kenya Traffic Act. This Act requires that any car being driven on Kenyan roads have a minimum of a third-party insurance cover.

Besides meeting a legal requirement, an insurance cover provides various levels of protection to the insured and other road users in the event of an accident. Of course, no one buys a car thinking I will be hit or hit another car. However, the reality is that accidents happen, resulting in car damages, bodily injuries, or even death. According to the  NTSA road accidents are on the rise. In 2020, for instance, there were 3,114 deaths on Kenyan roads, up by 5.8% compared to 2019.

As such, car insurance is essential as it protects you from financial liability in the event of an accident. However, the type of protection that your insurance company offers will depend on the type of insurance cover that you take out for your car.

What types of car insurance covers are there in Kenya?

In Kenya, there are three main types of car insurance covers. These are:

• Third-party insurance
• Third-party, fire, and theft
• Comprehensive insurance

Let us look at each of these types of insurance in-depth:

Third-Party Insurance

Third-party insurance offers you the most basic protections in the event of an accident. As mentioned, it is the most basic insurance cover required by Kenyan Traffic Law. It covers any damages/ injury/death caused by the insured (you) to the other party.

This means that if you have third party insurance and get into an accident, the insurance will only pay for damages/ injuries caused to the other car/ party and not to yourself or your car.

Third-Party, Fire, and Theft

The third-party fire and theft insurance cover offers slightly more protection to the policyholder than the third-party cover. Besides covering the third party in an accident, it also protects your car from possible fire and theft. Before signing on the dotted line, find out from your insurance company precisely what fire and theft circumstances are covered.

Comprehensive Insurance

Comprehensive insurance is the most extensive form of insurance coverage as it offers full protection to both parties in the case of an accident. Specifically, it offers third-party benefits, including damage, injuries, death, and legal liabilities arising from a car accident. It also covers damages to the insured vehicle caused by accident, natural calamities, floods, fire, or theft.

It is important to note that comprehensive insurance does not pay claims for injury or damage to the policyholder. It is recommended that you take out a separate insurance cover (such as a personal accident cover) for extra protection.

It is possible to have ‘add-ons’ to your comprehensive insurance, such as a Political Violence and Terrorism Cover and Excess Protector for Own Damage.

Which is the best insurance cover to get for my car?

The type of insurance that you get will depend on your budget and unique circumstances.

While comprehensive insurance will be the priciest, it will offer you the most benefits in case of an accident. With comprehensive insurance, you have peace of mind knowing that you don’t have to go back to your pocket if there are any accidents or incidents.

Third-party fire and theft offer you considerably more protection than a simple third- party cover. However, it is not common in the Kenyan market; perhaps not many people imagine their cars catching fire. On the other hand, theft is quite common, so this cover can come in quite handy in an unfortunate event. This type of insurance is also uncommon because the cost is not commensurate with its benefits.

The third-party cover offers you, the insured, no protection whatsoever and is akin to driving a ‘naked’ car. As explained, it only benefits the other party in case of an accident. Despite its limited protections, the third-party cover is the most common in the market, mainly due to its affordability.

How much does car insurance cost in Kenya?

An insurance cover cost depends on several factors, such as the type of car (private, commercial, PSV), market value, and age. For instance, most insurers in Kenya will not consider vehicles over 12 years old or those with a value of less than 300,000Kes for comprehensive insurance.

Cost of a third-party cover in Kenya

The third-party cover is the most affordable of the three options. Considering the factors listed above, it ranges from between 5,000kes- 7,500kes per annum for a private car.

Many insurance companies in Kenya will not offer a third party (TPO) to PSV chauffeur driven cars (taxis, Uber, Bolt). It is also mandatory for this category to have a passenger legal liability (PLL) cover for four passengers. On average, an annual PTO cover will cost around 9,500kes.

Insurance for commercial vehicles such as lorries, tippers, and trailers is calculated based on tonnage. On average, a TPO cover for a 30-ton vehicle starts from 25,000kes.

Cost of a comprehensive cover in Kenya

Comprehensive insurance offerings will vary from one insurer to the next. On average, insurance premium rates for a private car start from 3.2% of the car’s total value. This is in addition to training levy, policy holder’s compensation fund, and stamp duty payments.

For example, suppose you buy a Mazda CX5  worth 2.1 million Kes, and your insurance company is giving you a premium rate of 3.5%. In that case, you will pay a total premium of 74,880.75, according to a popular online motor insurance calculator.

If another insurer is offering a rate of 4.5% for the same car, then you would pay a total premium of 95,975.25.

In most cases, the premium percentage rate is negotiable, so do not hesitate to discuss with your insurer.

What exactly is covered by comprehensive insurance?

Other than the benefits mentioned above, your comprehensive insurance will also cover the following:

Windshield Limit- Windshield damage happens quite often on Kenyan roads. Your comprehensive cover provides a free windshield limit to cushion you against paying out of pocket. Most insurers will offer compensation from between 25-000-50,000kes per annum.  You should therefore confirm how much your windshield costs to ensure that you are adequately covered. If not, you can opt to purchase an extra windshield cover to bridge the difference.

Radio cassette limit– This benefit was popular when car radio cassette theft was high. Such crimes have fallen drastically, and this limit has lost its significance. That said, it is a free add-on that can still come in handy.

Civil strikes, commotion, and riots– Your comprehensive insurance covers loss or damage occasioned by civil strikes, commotion, and riots.

What is not covered by comprehensive insurance?

It is important to read the fine print when it comes to insurance because even a comprehensive cover does not cover everything. Some exceptions are:

Wear, tear, and depreciation– Your insurance coverage is not liable for any value lost due to normal vehicle wear and tear, including that of tires. In recent times some insurers have come up with insurance packages that include tires.

Acts of negligence– If your insurance company can prove that your claim is due to negligence on your part, they will not pay the claim. An example is if you were under the influence of drugs during the time of the accident.

Third-party liabilities outside of Kenya- If you travel to another country and cause an accident, your insurance will not take third party liability.

Use within airports– Your insurance is not liable if you cause damages in restricted areas, such as no go zones in an airport.