Having car insurance is a legal requirement and with the right level of cover, provides financial protection in the event of your vehicle being damaged.
It will also provide cover for injuries to other drivers, passengers or pedestrians, and their property.
Accidents happen, so it’s reassuring to know that you’re covered financially if you’re involved in one.
Why is car Insurance Necessary?
Having car insurance is essential because it covers your expenses in the event of vehicle damage or injuries to other drivers, passengers or pedestrians.
All motorists must be insured against their liability to other people, as stipulated in the Road Traffic Act.
Insurance can also provide financial support if your car is stolen, vandalized or destroyed by fire.
There may be instances in which you don’t need to insure your vehicle, for example, if you have declared your vehicle off the road through a Statutory Off Road Notification (SORN) from the NTSA.
Related: 8 Best Car Insurance Companies in Kenya.
What if I’m not insured?
Driving without car insurance is illegal. If you don’t have it, you could be fined or disqualified from driving.
The maximum fine is unlimited, plus you’ll receive six to eight penalty points on your license.
The Government is currently reviewing penalties for uninsured drivers who kill or are involved in accidents.
The police also have the power to seize any vehicle being driven without cover.
Types of car insurance
There are three levels of cover you can choose from – third party; third party, fire, and theft; and comprehensive.
This is the bare minimum required by law but isn’t always the cheapest. It covers injuries to other people and damage to others’ property.
Third-party, fire, and theft
This is the same as third-party but also covers the cost of repairs or a replacement vehicle if your car is stolen or damaged by fire.
This is the highest level of cover you can get. It protects against damage to your own car as well as accidents involving other people.
It can also include a courtesy car and legal expenses insurance; however, this may be at an additional cost.
Your insurer may also allow you to add named drivers to your policy who can also drive your car, but it’s important to remember that the main driver must be the person who drives the car the most.
How is the cost of car insurance worked out?
Your premium is based on a number of factors, including your age, where you live, the type of car you drive, your occupation, where your car is kept, what you use it for and whether you’ve been convicted of any motoring offenses.
You can often lower your premium by paying a higher excess, which is the amount you have to contribute towards the cost of a claim you make.
Young people in particular face high premiums because of the greater accident risk they carry and some may be tempted to cut corners to get a cheap deal.
However, the Insurance Fraud Enforcement Department (IFED) has warned motorists to be on their guard against ‘ghost brokers’ in the country who sell fake insurance.
They prey on those paying the highest premiums by offering cheap deals online, by the roadside or in restaurants. So always make sure your insurer is regulated.
See also: Digital Motor Insurance Certificate in Kenya
For every year you don’t make a claim on your car insurance, you’ll earn a years no-claims bonus (up to a maximum of 9 years).
This no-claims bonus is then translated into a discount at renewal, although a reduction in premium is not always guaranteed should there be a change in your circumstances or the markets.
Often, this will remain intact if you make a claim for an accident that wasn’t your fault. You must always notify your insurer of any accidents you’re involved in, even if you don’t make a claim.