Basics of motor vehicle insurance

By Vincent Kinyanjui

If you own a motor vehicle, it’s important to understand the basics of car insurance.

Nobody likes accidents, but they happen. Ensuring that a vehicle is properly insured is the responsibility of every driver.

Most people buy motor vehicle insurance not because of it’s importance, but because it is illegal to have an insured car on the road.

For insurance purposes, vehicles are classified as either private cars or commercial vehicles depending on the vehicle body type and its use.

Vehicles insured under motor private car policy are those used for social, domestic and pleasure purposes and for the insured’s business. Examples are saloons and station wagons.

The policy does not cover use of a vehicle for racing or hire. The main options of cover available are third party only; third party fire; theft and comprehensive.

With third party only cover, the policy will compensate the insured in the event of an accident. This is the minimum amount of motor vehicle insurance one can purchase.

Legally liable

The compensation will include costs and expenses, which the insured shall become legally liable to pay in case of death or bodily injury to any person, except death or injury to a person employed by the insured.

When it comes to third party fire and theft, the cover will in addition to third party liabilities, compensate for loss or damage to the motor vehicle arising from fire or theft.

Comprehensive cover is the widest scope of cover provided under a motor insurance policy. The insured will be indemnified against his legal liability to third parties, and loss of or damage to the motor vehicle and its accessories, subject to the policy terms, conditions and exclusions.

Before making a final decision about your policy, make sure you read and understand the fine print. What one company describes as full coverage might be very different from a policy that another provider defines with the same terminology.

It’s important to pay close attention to the exclusions detailed in the fine print of the policy.
Due to the stiff competition from the many insurers in the market, motor insurance has been innovatively enhanced to include extra benefits such as a personal accident cover, compensation of forced ATM withdrawals, alternative accommodation following an accident, road rescue and towing services.