Motor insurance is one of a few classes of insurance which are compulsory in the Kenya. The most important piece of legislation in this respect is the Road Traffic Act.
This makes it illegal to use a vehicle on a road, or public place, unless insurance is in force covering legal liability for injury to others and damage to their property.
In addition to complying with the requirements of the Road Traffic Act, all motor policies must meet the requirements of a number of national transport and safety authority (NTSA) Motor Insurance Directives.
There are 3 levels of insurance covers available under motor commercial:
- Third party only
- Third party, fire and theft
- Comprehensive
The range of commercial vehicles insured (and the associated risks) vary widely and include:
- Cars used in connection with a business
- Goods-carrying vehicles; the term used to describe all the different types of vehicles that are designed to carry goods. They are classified by insurers for risk assessment purposes either by their carrying capacity or their plated weight. The goods carried are not covered by the motor policy, cover instead being provided under a separate goods in transit policy
- Passenger-carrying vehicles, which include minibuses, coaches and buses. The main exposure for insurers comes from the risk of bodily injury to passengers.
- Hire vehicles. These fall into three categories:
- private hire; the hiring of a car with driver from the operator’s premises
- public hire; taxis which can be hired on the streets or at recognized taxi stands
- self-drive hire; the hire of a vehicle, such as a car or van, without a driver
- Agricultural and forestry vehicles, such as tractors, combine harvesters, threshing and baling machines. These vehicles will not usually be used a great deal on the roads and therefore present a lower risk to insurers
- Vehicles of special construction (special types), which include various types of vehicle which are also used as a tool of trade; such as ambulances, mobile shops, cranes and fork-lift trucks. The third party working risk is not covered by the motor policy, cover instead being provided by the insured’s public liability or engineering policies.
There are two distinct types of policies that are common in the commercial vehicle insurance market:
- Fleet. This is where a number of vehicles owned by the same company (usually a minimum of 10) are insured on a single policy. Fleet policies can consist of private cars, goods-carrying vehicles or other types or a mixture of different types. A number of insurers who offer ‘mini-fleet policies, which are for a minimum of five vehicles.
- Non-fleet – This is the term used to describe policies which insure individual or fewer than ten vehicles (or five if suitable for a mini-fleet cover).
Insurance firms also offer specialist motor trade policies. These are designed primarily for garages and similar businesses which sell and/or service and repair vehicles. In addition to cover for their own vehicles, they also have a variety of other needs (such as for damage to customers’ vehicles, test drives and breakdown recovery).
