Lang'ata MP Phelix Odiwuor, popularly known as Jalang'o, has announced ambitious plans to table a Bill in the National Assembly seeking to curb loopholes in the motor vehicle insurance industry.
Dubbed the Motor Insurance Bill 2024, Jalang'o seeks to scrap compulsory motor vehicle insurance for motorists. The MP says the bill is intended to offer more protection to motor vehicle owners.
"Most Kenyans take insurance covers for their vehicles, not because they need them, but because they don't want to be arrested," the lawmaker noted.
He added, "If you walk into insurance company's banking halls, you will find thousands of Kenyans who are following up for compensations that the insurance companies have refused to pay on a vehicle that was fully insured."
The MP also pointed out that insurance companies have made it a habit of using unscrupulous means to avoid compensating policyholders in the event of accidents. When compensation is made, it is often inadequate.
According to Jalang'o, this issue can be addressed through the Motor Insurance Bill 2024, which will require companies to fully compensate policyholders for covered vehicles as stipulated.
In the bill, Jalang'o also proposes that motor vehicle owners be reimbursed 50% of their premiums if their vehicle does not incur an accident during the year it is insured.
"People pay insurance of up to KSh500,000 per year, but where does this money go? Insurance companies go and invest it. Can you imagine if you took your KSh500,000 and put it on a business, at the end of the year, you could have had returns," the MP observed.
"When an insurance company takes your KSh500,000, they invest it, but when you get an accident, they also don't want to pay you. This Bill will make insurance companies serious and start paying policyholders. The work of those insurance staff who make sure you are not compensated will be over." Another issue the MP noted revolved around third-party coverage, which is the most common form of motor vehicle insurance in the country. According to Jalang'o, third-party insurance, despite its popularity, was practically useless since in the event of an accident, only one party is compensated under specific circumstances."
"Third-party is just a sticker that cannot help you if you had an accident; they will not pay you anything from a third-party and that is what 90 per cent of Kenyans run with around here. That tells you that people do not care about motor insurance because insurance companies do not actually pay."
Despite an elaborate explanation, a section of Kenyans was quick to poke holes in the legislator's proposed bill, with some terming it as unrealistic.
"Good try but the bill doesn’t make sense," one Kenyan noted. "Insurance works on probability and that is why you are not refunded any part of your premium in case you are not involved in an accident. Remember that when involved in an accident, in most cases, the compensation is way more than the premium."
