The arrival of ride hailing apps in the market at the start of 2015 marked a big change in the mobility industry. UBER was the first to launch in the market and remains the biggest player in Kenya, which serves as its second largest market in Africa. The rise of on demand services has massively disrupted the traditional players including cab companies, airport taxis and all other forms of public transport.
As a result, the industry has exploded worldwide and in Kenya with close to 10,000 on demand cars on the market. One of the requirements for a driver to be able to operate on these ride hailing apps is a valid car insurance policy fit for Passenger Service Vehicles (PSVs). Here we take a look into the types of covers available, liabilities covered and estimates for the insurance premiums rates.
Comprehensive PSV Cover
This is the most popular cover available for this class of vehicles. One of the reasons behind this popularity is because the motor vehicle is very valuable and is also source of the livelihood, it makes business and financial sense to get a bullet proof cover. IN addition, a number of the cars operating on this business are acquired using loans from banks and other finance firms, which make it compulsory for the customer to take a comprehensive insurance car insurance for the asset on loan. Comprehensive means that it covers all third party liabilities as well as the insured vehicle from accidental damage, fire, partial and complete theft. It is for this reason that comprehensive insurance is the most expensive cover. The two common additional riders normally available on this comprehensive insurance are:
Excess Protector: This is the most sought after additional rider. In case of an accident, the insured does not have to contribute to the cost of the repairs if the total bill is above the minimum excess which is usually stated at 5% of the value of the motor vehicle. For more details about the excess protector, check out this article . Unfortunately, this rider is no longer available from most insurance companies in the market because of the very poor claims experience specifically in the vehicles operating online apps like UBER, TAXIFY and LITTLE
Political Violence and Terrorism (PVT)
This is yet another common add-on to the comprehensive cover. It protects the insured asset against damage or loss arising out of events of a political or terrorism nature.
Comprehensive car insurance rates
There is less than 15 of the over 40 insurance companies offering motor cover for the UBER, TAXIFY, LITTLE class of cars so it is important to shop around when looking for cover.
Prices start at 5.5% of the value of the car for the basic comprehensive insurance cover. For example, for a car valued at KSh 1 million, a driver can expect to pay KSh 55,000 before taxes and any other insurance add-ons. The cost of the PVT extension is normally charged at 0.25% of the vehicle value. For the companies that offer the Excess Protector add-on it is charged at between 0.25 – 0.5 % of the vehicle value subject to a minimum amount between KSh 2,500 – 5,000
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Motor PSV Third Party Insurance
Although this is the less popular type of cover for these online ride hailing apps, it is still taken out by many especially those looking to save on cost. This covers the insured against third party liabilities for persons and property in the event of an accident. It is mandatory to include the Passenger Legal Liability (PLL) to cater for the passengers since they are fare paying. If any passengers are carried in the vehicle for reward (paying) then it is illegal for the insured to do so without PLL insurance.
PSV Third Party Car Insurance Rates
The rates for this insurance vary depending on the provider although most insurance companies don’t offer this cover in the Kenyan market.
For a typical saloon 4 passenger vehicle, the total cost starts at KSh 9,586. This is an annual fee inclusive of PLL for 4 passengers and all duties and taxes.
Optional Insurance Add-ons
Loss of income
This is yet again one of the not so common benefits that are available for this class of motor insurance business. In case of an accident, the vehicle may spend an extended period of time in the garage as repairs are going on. For this reason, the owner of the vehicle may want to take out a cover to re-imburse him/her for the lost earnings. The options available range from KSh 1,500 – 3,000 per day for up to 20 days.
The price of this rider add-on ranges from KSh 3,000 – 6000 per annum. It is important to note that it can only be used once and once it is depleted it can’t be used again in the same insurance period.
Personal Accident Insurance
This is a life insurance policy that is recommended for all members of the public irrespective of their profession. It offers compensation for the insured in case of death, partial or total disability, stated critical illnesses and accidental medical expenses re-imbursements. Most insurance companies offer this product with limits of up to KSh 10 millions upon death of the insured. It is also advisable for drivers and owners of PSV cars to take out this policy for family members. This is because they are often driven in the insured motor vehicle especially outside of business hours when vehicles are used for private, social and family events.
The price for the personal accident cover starts as low as KSh 500 per annum.
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AA Kenya Rescue
The AA rescue cover is one of the most popular optional benefits that drivers and partners take out. It is provided by the Automobile Association of Kenya (AA), which has a fleet of rescue vehicles nationwide and also has partnerships with independent towing companies and providers countrywide. It offers the member one free tow of up to 40km on breakdown, unlimited roadside assistance, auto clinics and many other exclusive benefits for members.
The cost of AA rescue is KSh 7,500 per annum for a single vehicle. For customers with fleets, various discounts may apply.
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Are you a driver, partner or businessperson operating on the online ride hailing apps and are looking for a good deal on your car insurance cover? Compare quotes from at least 5 different providers and get free expert and claims assistance. Get started here with a quote here or simply start an online chat with our insurance experts.