Log books: State acts tough on motor vehicle insurance

By John Oyuke

Motor vehicle owners and employees face tough times ahead as the fight against crime and road accidents goes a notch higher.

Effective January 1, next year, insurance companies will – within a specific time – be required to only issue temporary cover to new owners of a motor vehicle and only renew the cover on production of a new log book.

The Insurance Act is to be amended by adding a new section after section 76, that is 76A, spelling out the way business will be done.

It states that upon change of ownership of a motor vehicle, insurers would issue a temporary policy for a period not exceeding three months pending registration of the vehicle in the name of the new owner.

Insurers will therefore neither renew the temporary cover nor issue a new policy, unless the new owner provides proof of registration of the motor vehicle in his name by the Registrar.

This is according to amendments proposed to the Insurance Act Cap 487 in Finance Bill 2009. Section 10 of the Insurance (Motor Vehicle Third Party Risks) Act - Cap 405 is also to be amended to require that insurers would no longer be entitled to recover payments from the insured on judgments, which may exceed the provisions of the insurance policy starting January.

Amendment of act

The Budget also made other proposals likely to bring marked changes in the lives of vehicle owners such as an amendment of the Traffic Act - Cap 403.

Beginning next year, the Traffic Act would be amended to increase the number of days within which a commercial vehicle must be inspected and registered from 14 days to 30 days of release by the customs.

Under the proposed new laws, starting the same date, the validity period of a driving or/and conductor’s license of a Public Service Vehicle would also reduce from two years to one year.

Vehicle owners can, however, now migrate from the old generation log books to the new generation one free of charge. The log book now being electronically prepared has more security features.

On the transfer of motor vehicles, the law currently requires that a buyer of, for instance, a second hand motor vehicle should apply for change of ownership within 14 days of purchase.