CIC Blog

UNDERSTANDING THE DIFFERENT TYPES OF MOTOR INSURANCE COVERS

In Kenya, it is mandatory for your vehicle to have a motor insurance cover before being used on a public road. The law of Kenya requires you to display the car insurance certificate on the windshield of your car where it is possible for a police officer to inspect it.

The importance of having a motor insurance cover is that, it offers financial security in case one gets into an accident. This means that, the cover ensures you do not get any unplanned costs in the unfortunate event of an accident.

The cost of having a car insurance varies for different insurance types and insurance companies. Majority of insurance companies in Kenya offer three types of motor insurance covers which are; comprehensive insurance cover, third party insurance cover and third party fire and theft insurance cover.

While third-party insurance cover is cheaper and covers only third-party damages, the comprehensive car insurance cost, slightly varies owing to the wide range of benefits. Third party, fire and theft cover caters for third party liabilities such as injury, death or property damage; fire in the event the vehicle is damaged by fire and compensation in the event the vehicle is stolen.

Third-Party Insurance cover

Third-party insurance cover offers you the basic protection in the unfortunate event of an accident. This is a mandatory cover required by the traffic law as it covers damages, injury or death caused to the third party. (he is not party to the insurance contract)

When your car is insured under a third party cover, it means that, if you get into an accident, the insurance company will only pay for damages to property such as buildings, the other car or injury to the other person and not to yourself or your car. A CIC third party insurance covers you against;

  1. Damage to property that belong to other people like vehicle or buildings
  2. Death or injury to pedestrians or public
  3. Death or injury to passengers.

The cost of a private third party only car insurance costs KShs 5,000 and KShs 10,000 per year and the average market price for the cover goes between KShs 5,000 – 7,500 per year. 

Third party, fire and theft cover

While, the above discussed third party coverage provides protection only for the third party involved, third party fire and theft offers additional benefits too. This insurance policy covers for loss of the vehicle due to fire or theft and damage to property.

Comprehensive insurance cover

A comprehensive car insurance cover is not a mandatory cover but it is the most preferred by Kenyans. This cover offers full protection to both parties in case of an accident. A comprehensive insurance cover, offers financial security in case of a road accident or in case your car is stolen, damaged due to fire, riots, natural disasters like floods. This cover also offers third party benefits such as damages to other people’s properties like vehicle or buildings, injuries and death.

Different insurance companies have different additional coverages that are linked to their comprehensive insurance plans. These coverages provide cover for things such as windscreen, glass damage, entertainment unit, excess waiver among others.

A CIC comprehensive insurance covers you against:

  1. Accidental Damage
  2. Malicious Damage
  3. Theft
  4. Fire
  5. Third Party Liabilities
  6. Riot Strike and Civil Commotion
  7. Floods

The cost of a comprehensive insurance cover is calculated based on the value of your car once valuation is done. A CIC comprehensive insurance cover cost rates vary from 6 per cent to 3.5 per cent of the value of your car.

Conclusion

When buying a car, insurance is very important because it offers protection to the person and their asset. Before shopping for a motor insurance cover, one should take their time to understand different types of insurance to be able to buy what suits them best.