Car owners can now breath a sigh of relief after the High Court suspended the planned 50 per cent hike in insurance cover costs.
In a ruling delivered on Wednesday, January 12, the High Court directed that the impending increase should be halted until a case filed by the Kenya Human Rights Commission (KHRC) is heard and determined.
In the ruling, the insurance companies were barred from effecting the 50 per cent rise as well as the decision to exclude certain categories motor-vehicles from comprehensive cover.
"The High Court has suspended the increase in insurance premiums and the decision by insurance companies to exclude certain categories motor-vehicles from their comprehensive cover pending hearing and determination of the case," celebrated KHRC, the petitioner.
The court further directed the matter to be mentioned on April 14, 2022 and all respondents were directed to serve their responses to the petition within 21 days.
In its suit, the human rights lobby group accused the Insurance Regulatory Authority (IRA) of illegally sanctioning for the increase in the premiums.
“Considering the mandatory nature of motor vehicle insurance, then the said service has to be offered in a manner that protects consumers’ health, safety and economic interests.
"To unjustifiably increase premiums without consultations and justification violates the rights of consumers. To further exclude a specific category of vehicles from comprehensive insurance cover without justification equally violates the rights of consumers," read the court papers filed by KHRC.
The insurance companies had argued that the surge in insurance costs was necessitated by the increased number of claims following a rise in accidents.
Most of the companies indicated that the industry had been making losses since the number of claims made annually outstrip those of the premiums paid.
For instance, some insurance providers who have a Ksh47,000 private motor vehicle cover revised it to over Ksh72,000 effective January 1, 2022.
Another company operating in Nairobi revised its premiums from Ksh51,000 to Ksh74,000.
The firms operating in the industry revealed that they had made as much as Ksh3.27 billion losses in a period of 20 years due to fraud.
