Third-party insurance is a legal minimum motor insurance required for all vehicles in Kenya that protects road users from driver’s liability claims.
Road users are covered by the insurance financially in case of accidents, as the cover dictates that any motor vehicle risk is managed under the Kenyan law.
To enforce the effectiveness of the insurance, the law under the Motor Vehicles Third Party Risks Act, Cap. 405, the Traffic Act Cap. 403 are used.
However, the Act prohibits the transfer of the insurance to another person or a vehicle that was not the primary insurer.
“Subject to this Act, no person shall use, or cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation to the user of the vehicle… such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Act.” Motor Vehicles Third Party Risks Act, Cap. 405 dictates.
Additionally, a licensing officer may issue a vehicle license only if the vehicle is duly registered and has the correct particulars in accordance with the Insurance Act.
Failure to have valid third-party cover means motor vehicle owners cannot obtain or renew their licenses, thereby rendering them illegal road users.
Application Requirements
Third-party insurance covers most motor vehicles, with exceptions for certain government vehicles and agricultural tractors used solely on personal land.
Applications for the cover are made through an insurer licensed to transact motor vehicle insurance business under the Insurance Act, Cap 487.
By applying for the cover, the owner of the insured motor vehicle insures against liability for death or injury caused by the vehicle on the road.
The law requires a minimum indemnity limit of KSh 3 million per person for death or bodily injury arising from any one claim.
A certificate of insurance and a prescribed form of the policy are issued after a successful application for the cover.
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Coverage Under the Third-Party Insurance Cover
Third-party insurance indemnifies the insured against legal liability to others, but does not cover the policyholder.
In permitted cases, the cover offers compensation for any injury or death to road users and, in some instances, covers the cost of property damage caused by insured drivers.
Section 10 of the Insurance Act prioritizes the victim’s protection, and insurers have a direct duty to pay the costs and interest incurred by the third party.
The insurance coverage, however, excludes passengers carried without making payment in private vehicles.
Additionally, the policy does not cover any agreement made beyond the legal requirements, and the maximum payout is capped at KSh 3 million per person per claim.
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Non-Compliance Penalties
Any form of breach of the insurance cover leads to sanctions under Section 4(2) of the Insurance Act Cap 405.
A fine not exceeding KSh 10,000, imprisonment for up to two years, or both, is imposed on any insurer that breaches the policy.
A first conviction may result in disqualification from holding a driving license for 12 months or longer, depending on the court’s ruling.
Failure to produce an insurance certificate after an accident is considered a separate offense.
