Motorists will have to part ways with Ksh3,000 to cover for damages of road assets through their annual car insurance if an amendment to the law is adopted.
The Kenya Roads Board (KRB) is planning to set aside between Sh500 and Sh3,00 from the annual third party covers to be spent on replacement of damaged road infrastructures including guardrails, streetlight and, signage during accidents.
The amount to be paid will vary depending on the engine capacity of the car being insured with the plan set to generate over Sh10 billion every year.
KRB acting managing director Rashid Mohamed said the move will need an amendment to the Insurance Act to remove the compensation for road assets from the third party covers and introduce the fees.
The fee will be submitted to KRB.
“It does not necessarily mean motorists will pay more because the amount is already covered in the current third party insurance fees. It will only be set aside to make it easier to access for use in replacing damaged road assets. It is currently costly and time-consuming to seek compensation for damaged road signage for example,” Mohamed said.
The proposal by the KRB has been forwarded to the Insurance Regulatory Authority for scrutiny.
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The proposal will effectively see a portion of what motorists give to the insurance firm to cover third party assets chopped and given to the road agencies, something that has attracted strong criticism from underwriters.
The Association of Kenya Insurers (AKI) executive director Tom Gichuchi questioned the formula to be used to apportion the specific amount to cover road assets from the premium paid by motorists in the third party covers.
“The third-party covers a lot of other things including the other vehicles on the road, houses, bicycles, and the other road assets like street lighting. How will they tell the portion to take out from the premium?” Posed Gichuhi.
He further stated that the damaged assets, whether from accidents or otherwise, are already covered by the Sh18 per liter motorists pay while buying fuel.
