Lang’ata Member of Parliament Phelix Odiwuor, widely known as Jalang’o, has revealed his intention to introduce a new bill in Parliament designed to reform Kenya’s motor vehicle insurance sector. The proposed Motor Insurance Bill 2024 aims to address long-standing problems within the industry, including the requirement for compulsory insurance and the perceived inadequacy of compensation provided to policyholders.
Jalang’o’s Bill proposes a significant change: scrapping the mandatory nature of vehicle insurance. He argues that the primary reason most Kenyans purchase insurance is to avoid legal repercussions, rather than a genuine need for coverage. “Most Kenyans take insurance covers for their vehicles, not because they need them, but because they don’t want to be arrested,” he stated.
The MP also highlighted widespread dissatisfaction with insurance companies’ handling of claims. “If you walk into insurance companies’ banking halls, you will find thousands of Kenyans following up on compensations that the insurance companies have refused to pay on a fully insured vehicle,” Jalang’o observed. He believes that numerous insurers exploit loopholes to evade claim settlements, leaving policyholders significantly under-compensated.
To tackle these issues, the proposed Bill would mandate that insurance companies fully honor all valid claims and provide appropriate compensation for insured vehicles. Furthermore, the MP has suggested that policyholders who do not file any claims during a given year should receive a 50% rebate on their insurance premiums. “People pay insurance of up to Sh500,000 per year, but where does this money go? Insurance companies go and invest it,” he explained.
Jalang’o also criticized the prevailing third-party insurance, asserting that this type of coverage offers minimal protection in the event of an accident. “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,” he said, adding that the majority of Kenyan vehicle owners, approximately 90%, rely on this inadequate form of insurance.
