5 ways to get cheaper car insurance in Kenya

Here are 5 simple ways to get a saving on your car insurance premium in Kenya.

According to Kenyan law, car insurance is mandatory for anyone to operate a vehicle on Kenyan roads. Third party car insurance is the minimum required cover for motor owners. A large percentage of motor vehicle owners use comprehensive motor insurance. The annual cost of this can vary from as low as KSh 18,000 all way to over KSh 500,000 depending on the market value of the vehicle. Below are 5 simple ways in which you can get a saving on your insurance costs whether buying a new car or renewing your existing car insurance policy!

BUY ONLINE

With the advent of online shopping in Kenya with the likes of jumia.co.ke and kililmall.co.ke, you can also go online and shop for financial services like credit cards, bank accounts and last but not least insurance. Using websites like www.pesabazaar.com, online price comparison portals, you can check the cost of insurance, benefits, limits and more from many different insurance companies in the market all at your fingertips. In addition, you can also compare with insurance company websites like jubilee insurance, old mutual insurance which offer live prices on their respective websites. In addition, check out new products in the market like Heritage Auto Correct motor insurance policy. It is geared at savvy customers and use telematics to score and rate your With the advent of technology, the customer now truly has choices in the market, convenience, savings and transparency. So next time you are shopping for your new car insurance or renewal policy, start your journey online before you bother heading offline into company offices, agents and brokers.

Remove non-essential add-ons

When purchasing your car insurance, look closely at the quote to verify the add-ons section. These are normally the insurance options on top of the basic car insurance cover. The most common ones are the excess protector for own damage, excess protector for theft, political violence and terrorism cover, courtesy car, towing and rescue by AA Kenya and Infama and more. So if you want to get your insurance costs down, review these optional add-ons and decide whether it makes sense for your particular needs to get rid of them.

Compare 10 car insurance quotes online!

Use Your NCD

The No Claims Discount (NCD) is a scheme that was introduced in the Kenyan insurance market to reward good drivers with clean claims record. This is a common concept in other developed markets overseas where a customer receives discounts on the cost of his insurance each they spend without claiming. In Kenya, the system has failed to take off because of lack of coordination between the different insurers in the market. However, with advance planning, a customer is able to get their NCD certificate and use it to shop around between different providers to get a good deal on their insurance cover. In addition, staying with a single insurer and proving a good claims record can give you the customer leeway in negotiating cheaper insurance rates.

Look out for offers

This is yet another way to get your motor insurance policy in Kenya at a cheaper price. Plan ahead before buying your car insurance or renewing you existing motor policy, many banks (bancassurance), brokers and online insurance platforms give out offers to attract new customers or retain existing ones. Discounts may apply to the motor insurance prices, offers for free fuel, shopping vouchers, credit card offers. These can help you pay less up front costs or receive rebates in the form of offers. However, it is important to calculate the total net savings on any offers and promotions because many times these offers may only be amounting to marketing gimmicks.

NEED A QUOTE?

If you are looking to save up to 30% on your car insurance premiums, compare benefits and liability limits from up to 10 top car insurance companies in Kenya, then check out live quotes on the link below or get chatting with one of expert sales agents online.

https://www.pesabazaar.com/insurance/motor-insurance/comprehensive

 

Why Car Insurance Rates Getting Expensive in Kenya?

With the car insurance industry making a loss of more than KSh 3.8 Billions in 2018, let’s compare Kenya, US and UK motor insurance rates to understand why.

The cost of living in Kenya has steadily risen affecting most households across the country. This has been driven largely by the high inflation rates caused by rise in overall food prices due to poor harvests and bad weather. Secondly, tightening of the overall government taxation regime has also had a large impact on many households. Case in point is the introduction of the 8% VAT on fuel which has previously been an exclusion. Car owners have been on the receiving end of this. As car insurance rates had climbed sharply at the start of the decade mandated by the Insurance Regulatory Authority (IRA) in its circular stating minimum premium rates chargeable, stiff competition and price undercutting has forced the rates to come lower over the last few years. This has forced the general insurance companies in Kenya to suffer heavy losses in the car insurance business line. Let’s look deeper into the state of the motor insurance market in Kenya using data published by the Association of Kenyan Insurers (AKI) for the 2018 year.

Car Insurance Rates for Private Cars

Kenya imports just under 100,000 vehicles every year from second hand markets like Japan and Europe and the majority of them are private or PSV chauffeur driven purpose. Total gross premiums underwritten for motor private insurance were just over KSh 22.5 Billions for the year 2018 recording a 5% increase from the year before at KSh 21.5. This accounted for 18% of the total insurance market. Of the insurance premiums collected, just over KSh 14.3 was the total claims incurred by the insurance companies. Add to that another KSh 9.1 Billions in management expenses, commissions and third party costs and the industry fell into a loss of KSh 2.7 Billion for the motor private insurance business class.

The hardest hit car insurance companies were BRITAM, UAP General and Geminia insurance, suffering losses of 500, 306 and 295 millions respectively The profitable providers among the top car insurance companies in Kenya were AMACO and AIG and AIG at KSh 234 million and KSh 144 million respectively. Only 9 motor insurance companies reported a profit in this class of business further underlining the unsustainability of the current market regime.

There are multiple reasons that explain these persistent losses in this insurance class. First and foremost is the epidemic of fraud and criminality in the industry. Many consumers have gotten involved in rackets of criminals who are notorious for defrauding companies. There are many rings who engage in stealing and reselling spare parts, intentionally writing off motor vehicles for claims pay-outs.
In addition there are also fraudulent service providers like garages, assessors who have profited from car insurance claims.

Secondly, the stiff competition in the market has led to severe price undercutting by insurance companies in order to win business. The car insurance rates for private motorcars stands at roughly 3.5 – 4.5 % of the value of the car from most car insurance companies in Kenya. Jubilee insurance and APA insurance offer different insurance rates depending on the age and value of the vehicle but the majority of the industry still offers flat rates for all vehicles. Heritage insurance has also developed a telematics based product to cater to the market, it monitors the driving habits of the customer and rewards them with up to 15% cash back of their premiums for good performance. Check out our article for more details on the Heritage Auto Correct product.

While the IRA in Kenya had earlier mandated insurance companies to offer motor insurance covers in the range of 7% of the value of the vehicle, stiff competition and under cutting has led to the price decline to present levels.

Last not least, the lack of a centralised insurance data sharing system has also cost the insurance companies heavily. Many fraudulent claimants have taken advantage of this loophole to launch several claims during the same insurance period on a single motor vehicle. In this way they receive claims pay-outs from multiple insurance companies and make huge profits.

Motor Insurance rates for Commercial & PSV

The commercial motor insurance segment fares much better in terms of profitability of the general insurance underwriters in Kenya.

From the table presented below, the segment made an underwriting loss of of KSh 1.1 Billions. Although not profitable, this fares much better than the private market segment.

This business has also greatly benefited from the professionalisation of the PSV motor insurance segment. With the advent of UBER, BOLT and LITTLE cabs in the Kenyan app hailing market, this has driven the uptake and compliance of PSV motor insurance for chauffeur driven cars used on these apps.

The growing concern is the increasing losses from partial and total theft and the high accident rates on these app hailing cars. These apps allow the driver to drive for long periods of time up to 18 hours a day. This has increased the number of accidents and insurance claims. It is because of this that the rates for PSV motor insurance companies have gone up to a basic of 6% of the value of the car. Most companies are have also set a minimum premium irrespective of the rates in a bid to cushion themselves against losses. In addition, most PSV insurance companies in Kenya have shied away from covering these vehicles on the market due to the heavy losses incurred.

Table showing a summary of the car insurance market in Kenya 2018.

Motor class Car Insurance rate (basic) 2018 insurance premiums 2018 insurance

Claims

Profit/Loss
Motor commercial 6% for PSV chauffeur 23.6 billions 13.8 billions 1.1 Billions loss
Motor private 4% 22.5 billions 14.3 billions 2.7 Billions loss
Comparison of Car Insurance rates in Kenya vs. USA & UK

While most motorists in Kenya will start to about the rising cost of car insurance, car owners in other parts of the world have it a lot worse! In Europe and North America, the rates for insuring a car can be even higher than the cost of the car! This is because the ratings are based on the risk profile of the insured customer and not the vehicle itself.

For the USA, the average car insurance annual premiums were USD 1,308 (equalling KSh 131,000) with the highest state clocking in at USD 2,060 (nearly KSh 200,000) per annum. In the USA, car insurance rates vary very drastically state by state and also depending on the age of the insured, the young drivers are charged very high rates because they are notoriously more dangerous behind the wheel. It is not uncommon for young adults to pay as high as USD 5,000 per annum for their car insurance. The rates are also split by gender where ladies typically pay slightly lower rates for their premiums. The second example is England, while it is possible to buy a good 2nd hand vehicle for less than 500 British Pounds, the car insurance on such for a young driver can quite easily reach 1,000 pounds per annum !

The type of car insured also affects the rates significantly, for shiny sports cars like Ferraris, one can expect to pay very high insurance premiums compared to ordinary family sedans and vans. This is one similarity with Kenya where some insurance companies charge high car insurance rates for specific types of cars like BMWs, Subarus and the likes. In fact, in the local market, AIG has stopped insuring certain types of vehicles because of the high claims ratios year after year. Because of the different factors that go into pricing for a car insurance for any one customer, buyers in Western markets have to shop around online using comparison platforms in order to get the best car insurance rates on the market. It is really compare and save save !!

GET A QUOTE

Are you looking for a car insurance quote ? Do you want to compare up to 10 insurance quotes online from the leading underwriters in Kenya? Check out Third Party Only (TPO) and Comprehensive quotes from as low as KSh 2,049!
Get quote on https://www.pesabazaar.com/

 

 

Cheap Car insurance for Ladies in Kenya

There has been a rise in special car insurance schemes for lady drivers in Kenya, products that are of much better value to the customer. These have benefits similar to traditional comprehensive motor insurance policy but they also include many add-ons that are targeted at lady customers at great discounts. In this article why ladies enjoy these exclusive packages and the most popular ladies car insurance products on the market in Kenya.

Why Ladies Car Insurance?

All across the world from the least to the most developed countries, ladies have been proven to statistically be better and safer drivers. This has resulted in insurance companies extending discounted pricing on car insurance policies not just here in Kenya but overseas as well. It is because of the reasons below that ladies enjoy these special pricing and packages:

  1. They drive for less hours
  2. They drive at lower speeds
  3. They rarely drive at night
  4. They are more cautious on the road
  5. They have fewer impaired driving convictions
  6. They take good car of their vehicle (repairs and storage)

In analysing the factors above, it was concluded that female drivers are have a much lower accident frequency, have less speeding tickets than their male counterparts. In fact, global statistics show that speeding is more likely to be a factor for men (24%) than for women (15%). Lastly, female car insurance policy holders are less likely to drive impaired or under influence of alcoholic substances (DUI). A research conducted in the USA, the FBI reported that 716,398 men were arrested for DUIs compared to 221,778 women in 2010.

However, for women in the UK and the EU, it is no longer possible to get a discount on insurance policies. The European Court of Justices’s gender ruling came into effect in December 2012 and had a huge impact on car insurance for women. It made it illegal for insurance companies to discriminate on price by using the gender of the applicant.

In Kenya, there are 2 popular car insurance products for women:

Lady Jubilee Car Insurance

Jubilee insurance offers many types of car insurance for private, commercial, PSV and special purpose vehicles. It also offers the Lady Jubilee Motor Insurance exclusively for Kenyan ladies. It is a full comprehensive cover with added benefits on top of the asset and liabilities cover.

The Lady Jubilee cover has 3 options that are based on the value of customer’s motor vehicle

Bronze:        For car value below 1,000,000

Silver:           For car value between KES 1,000,00 to KES 2,000,000

Platinum:    For car value that is above KES 2,000,000

In addition to the traditional car insurance cover, it also has the following benefits on the policy

Handbag contents AA Road Rescue
School fees on death Lady Jubilee Gift Pack
Home content insurance Aga Khan Medical check-up
Personal accident cover for insured Excess protector
Accommodation after accident Shopping vouchers
Forced ATM withdrawal Preloaded OIL Libya card

The cost of the Lady Jubilee cover is at 5% of the value of the insured vehicle with the minimum premium as KSh 20,000. With all the extra packed benefits on the policy, it makes the product very much value for money.

Compare 10 car insurance quotes online!

CIC Lady Auto Car Insurance

CIC Insurance much like Jubilee also offers an exclusive product for ladies in addition to the other motor insurance packages for all customers.

CIC Lady Auto Insurance

The CIC Lady Auto motor insurance package contains the following benefits

  1. Courtesy Car
  2. Maximum of 24 days subject to an excess of the first three days
  3. Personal Accident Cover
  4. A shared Personal Accident cover for the nuclear family as a result of incidences involving the insured motor vehicle with the following benefits:
  5. A shared last expense cover for the nuclear family of Kshs. 100,000 as a result of incidences involving the insured motor vehicle.
  6. A personal Accident cover for one indoor employee whilst travelling in the insured motor vehicle with the following benefits.
  7. Trauma Counseling for persons involved in any incident• Reimbursement of third party medical expenses incurred up to maximum Ksh 50,000/-
  8. Replacement of Lost Car Keys following partial theft Up to a maximum of Ksh 5000/-
  9. Forced ATM Withdrawal Maximum Limit Ksh 15 000/-
  10. 24hr roadside assistance services countrywide and defensive driving and road safety seminars for AA Kenya members.

The insurance rates for this product start at 5% of the sum insured with a minimum of KSh 30,000. Vehicles to be insured on this product must not be more than 12 years old.

GET a QUOTE

If you are looking for a quote for car insurance, to compare benefits, limits, providers and finally price, then talk to us. You can also compare up to 10 quotes online instantly by getting a quote here

Prices start from KSh 20,000 per annum!

 

TOP Trends in Car Insurance Market in Kenya

These new trends have revolutionised the car insurance market in the West and are set to disrupt the Kenyan market in the days to come

Car insurance is a mandatory requirement for all vehicles operating on Kenyan roads. It is also the biggest sector in the insurance market accounting for over 25% of the total premiums collected. With over 40 insurance companies in the market, the changing customer is looking for innovation from insurers to offer tailor made and attractive covers. The market has remained fairly stagnant with heavy losses and fraud biting hard on insurance company profitability.  With the advent of new international players in the local Kenyan insurance market like Allianz, Cigna and more, things are set to change for the better. In addition, the rise of Fintech start-ups brings online insurance like www.pesabazaar.com have started shifting the industry towards a more agile and customer centric business model. Here we example some of the most common car insurance trends that we can expect to see in the Kenyan market in the coming months and years.

Pay As You Go Car Insurance

In Kenya, the car insurance policy is an annual contract that one enters into without rebate. For some customers, this may not make financial sense for customers that for example are frequent travellers therefore leave their vehicles parked at home. Therefore many providers in the West offer pay as you go car insurance. With the use of telematics, the insurance company can calculate how much the customer is using the vehicle and charge accordingly.  One of the biggest providers of pay as you go car insurance is metromile in the USA, customers have saved thousands of dollars especially in urban areas with good public transport systems

Metromile car insurance savings
Metromile Car Insurance savings

CashBack

This has been around for a while and continues to add value to customers in the market. Customers in the Kenyan car insurance market complain of the fact that they don’t enjoy any benefits from their car insurance policy apart from at the point of an accident. There is no reward for the safe drivers who don’t claim on their insurance policy. The Insurance Regulatory Authority (IRA) had introduced the No Claims Discount (NCD) system but it failed to take off because of the persistent price wars and undercutting from the insurance providers in the market. What is increasingly popular in the USA and Europe markets is cash back and benefits system. Among the list of benefits for well performing customers include

  • Vouchers for UBER
  • Insurance Premium refunds
  • Shopping discounts
  • Fuel discounts and vouchers
Discovery Car insurance
Discovery Car Insurance

This system has incentivised customers to take care while driving and has gamified the insurance cover. Customers are urged to drive well and avoid insurance claims in return for appealing rewards and bonuses. A great example of this system is the Discovery car insurance in South Africa which has taken the market by storm.

Peer to Peer Car Insurance

This is a new form of insurance, which is similar to self-insurance. Several high profile insurance start-ups have emerged in the West. The concept is for a customer to get together a group of friends/colleagues/relatives and form a small cluster of say 20. The vehicles in this pool are insured and depending on the performance of this, members can enjoy lower premiums, get back part of the premiums contributed at the end of the insurance period. This kind of peer to peer insurance has been tried in the United Kingdom with a popular start-up Guevara

RideShare Car Insurance

With the explosion of the sharing economy in the 21st century, consumers are moving more and more towards leasing every asset they use as opposed to outright ownership. Therefore, the market for leasing cars, motorcycles, bikes and scooters has exploded especially in West and in Asia. Services like car2go in Italy and scooter sharing bird have revolutionised urban transport. As a result, insurance companies have had to come up with innovative products for this market. Insurance is now offered per hire/ride meaning if the lessor encounters any mishaps, they can be re-imbursed. In addition, many customers have also taken out public liability insurance covers to protect themselves in case they are involved in an accident while operating a leased bike, scooter or car. Quite common also is the provider of these leasing services takes out an insurance cover on the asset for cover when the asset is in and out of use.

GET A CAR INSURANCE QUOTE

If you are looking to compare car insurance quotes from top providers in the Kenyan market, checkout the leading online insurance aggregator in Kenya, get a quote. Compare prices, benefits from multiple providers and also check out the customer reviews to find out what other customers are saying about their experiences.

How Comprehensive Car Insurance works in Kenya

Comprehensive is the best car insurance policy on the market in the Kenya. Below we look into the details of the cover, prices, how to get the cover and finally what happens in the event of an insurance claim.

When it comes to getting a motor insurance cover in Kenya, one is faced with 3 choices:

  • Comprehensive
  • Third Party Only (TPO)
  • Third Party Fire &Theft (TP

The TPO cover is the most popular cover on the market because it is the most cost friendly starting at KSh 5,063. It is also the lowest cover required and mandated by law to be able to operate a motor vehicle on Kenyan roads according to the traffic act Cap 405

In this series, we shall look at the comprehensive insurance cover and explore how it works, what it covers, how to get on cover and the claims process!

Car Insurance Companies

Most of the companies offering General Insurance products also offer car insurance. While all companies will offer this for private cars and commercial vehicles, most have already shied away for PSV related vehicles like UBER/Taxify and Matatu buses. Therefore, when getting comprehensive car insurance, shop around and see where you could get the best value for money.

The table below shows a typical comprehensive car insurance policy offered in Kenya and what is covered

COVER LIMIT (KSh)
Third party property damage 20,000,000
Death Injury to any one person 3,000,000
Death Injury any one event Unlimited
Passenger legal Liability one person 4,000,000
Passenger Legal Liability One event 20,000,000
Authorised Repair Limit 50,000
Emergency Medical Expenses 50,000
Towing 50,000
Windscreen damage 50,000
Entertainment Unit 50,000
Floods, Earthquakes, Thunder Covered
Riot, Strikes, Fire Covered

Compare 10 car insurance quotes online!

Windscreen and Radio Cover

This is a special section of the comprehensive car insurance cover. It normally covers from KSh 30,000 up to KSh 100,000 for damages or loss to the windscreen and car entertainment system separately. While car radio thefts were prevalent in the past, they are much less common presently, windscreen damage is the most common on this cover. Customers can also buy a higher limit of insurance for this section at a price, which is normally 10% of the additional limit required. For example, to buy an extra KSh 50,000 of windscreen cover, one pays KSh 5,000.

In case of damage, this cover is not subject the excess requirements on the insurance policy. The damage claim is admissible however small. Many car insurance companies will normally settle such a claim on re-imbursement. This means that the insured will repair the damages and present receipts for re-imbursement.

In addition, after a claim has been admitted and settled, the client has to buy a windscreen cover re-instatement at a cost of 10% of the windscreen limit on the policy

Accidental Damage and Theft

This is the biggest and most often claimed part of the comprehensive car insurance policy. This covers against physical damage to the insured vehicle from road accidents caused by the insured and third parties. The motor policy will then foot the costs of towing, inspection and repairs subject to the excess terms discussed in the section below.

Car Insurance Theft
Car Insurance – Theft

In addition, comprehensive insurance in Kenya covers partial and full theft of the vehicle. Partial theft is where parts and accessories like tyres, side mirrors, etc are stolen while full theft the entire vehicle is taken. Again, this insurance covers these losses subject to excess terms.

Excess Protector

This is the most recommended add-on to the basic comprehensive car insurance. It kicks in when an accident has occurred and the vehicle is to be repaired. As the name suggests, it protects the insured against paying excesses from their own pocket. The excess payable is normally set at 2.5% of the vehicle value for private cars and 5% of vehicle value for PSV and commercial cars. It is also subject to a minimum of about KSh 20,000. Check your quotes and policy schedule for more details and specific values for the policy. If the damage repair costs exceed these figures, the excess protector kicks in and the insured does not have to pay a penny out of pocket. For a detailed explanation of the excess protector, description and examples of the different scenarios, check out this excess protector guide

Compare 10 car insurance quotes online!

Motor Insurance Rates and NCD

When it comes to rates for comprehensive car insurance in Kenya, it’s all about compare and shop around. Generally, the rate will be between 3-4% of the market value of your car for the basic comprehensive cover. The insurance industry in Kenya introduced the concept of the No Claims Discount (NCD) in the early 2000 but this concept failed to take off. It promised to reward good drivers with no insurance claims with low prices while punishing high claiming clients. However due to lack of information sharing in the industry and vigorous undercutting, it failed to take off.

It is always advisable to add excess protector for own damage and political violence and terrorism (PVT) cover to the basic comprehensive cover. These normally go for 0.25% each of the value of the car to be insured subject to a minimum of KSh 1,500 each. While these are the most common add-ons, you can check out additional benefits and their prices on a comparison site like www.pesabazaar.com

Car Insurance Fire
Car Insurance – Fire

How To Make a Car Insurance Claim

With the high number of vehicles on the roads, the NTSA statistics reports over 683 people have lost their lives in 2019 as a result of road accidents. Therefore, in case of an accident, don’t panic. Get out of your vehicle and step away from the scene. Do not accept liability of any kind. Wait for the police to arrive and get in touch with your agent/broker. They advise on how to lodge a claim and help you with towing, paper work, accident assessors and garages. It is therefore crucial to have a good agent/broker for when the bad times come.

GET A QUOTE

If you are looking for a quote for comprehensive car insurance, to compare at least 10 different providers, prices, benefits and customer reviews, click here to get a quote instantly.