The High Court on Wednesday, January 12 suspended the move by insurance firms to increase motor vehicle cover premiums and their decision to exclude certain categories of motor-vehicles from their comprehensive cover pending hearing and determination of a case.
The suit was filed by the Kenya Human Rights Commission (KHCR) in response to price hikes and adjusted terms by insurance companies. KHCR also sued the Insurance Regulatory Authority (IRA) as it accused the regulator of abandoning its duty to protect consumers.
KHCR highlighted public notices by several insurance companies announcing an increase of up to 50 per cent of premiums for Motor-Vehicle Comprehensive cover starting 2022.
“A number of insurance companies have also announced that they will not offer a comprehensive insurance cover for motor vehicles which are older than 12 years or with a value of less than Sh600,000,” they further observed in court documents.
KHCR considers the actions by the insurance companies to be discriminatory, unjustified and illegal. They also believe that consumer rights have been violated.
The lobby highlighted potential safety risks faced by the general public if the firms maintained their stance on no longer offering insurance for vehicles older than 12 years or with a value of less than Ksh600,000.
“This is discriminatory since the said vehicles are still in use and without proper insurance; the said vehicles are a risk to the safety of the public and other road users,” KHCR Executive Director Davis Malombe noted.
They further poked holes into the increased rates, terming them punitive and oppressive.
“Ordinarily premiums for the comprehensive cover are tabulated using a definite formula which was 4 per cent of the value of the motor vehicle. Any amount above this has to be justified and has to involve the public,” KHCR maintains.
According to KHCR, the insurance companies have pinned the increase of premiums on a surge of claims, some of which are fraudulent.