Motor Vehicle Commercial Insurance in Kenya: Why You Need It and How to Get the Best

commercial insurance

‍As an owner of a commercial vehicle, you face several challenges. For one thing, these are expensive assets that need to be protected from potential threats and financial liabilities. Secondly, as a business entity, you will need to cover any third-party liability arising from the ownership or usage of your commercial vehicle. Unfortunately, obtaining affordable auto insurance can prove challenging for most small business owners. However, this is where an understanding of the market, your options, and risks comes into play. Read on to know more about motor vehicle commercial insurance in Kenya and its different types to get the best deal possible.

What is Motor Vehicle Commercial Insurance in Kenya?

Motor vehicle commercial insurance is the basic type of insurance that is required for any commercial vehicle. This insurance protects your business against both direct and third-party losses. Third-party losses include medical costs arising from injuries to another person, repair costs of other vehicles damaged in the accident, legal fees arising from defending yourself against a third-party lawsuit, and any other expenses arising from an accident involving your commercial vehicle. Direct losses on the other hand include costs arising from repairs and medical expenses of the driver and passengers of the vehicle.

Motor Vehicle Commercial Insurance Types in Kenya

Depending on the type of insurance, the coverage amount and premium charged may vary. The policy comes in three levels of cover:

  • Third-Party Only Insurance: Third-party insurance allows coverage facing claims of damages and losses incurred by a driver who is not the insured, the principal, and is hence not covered under the insurance policy. This type of insurance is also known as automobile insurance. It is subdivided into two types. First,

Bodily injury liability covers the damage following injuries from a person. These comprise expenses like hospital care, lost earnings, pain, and suffering due to the accident. Property liability covers costs following the damages to or loss of property. 

  • Third-party fire and theft insurance: Third–party, fire, and theft insurance is similar to third–party cover where it covers damage to another person or their property if you’re involved in an accident. It provides additional cover to your vehicles for damage caused by fire or if they are stolen.

When acquiring a third party, fire, and theft insurance, the repair costs of your vehicle should be a major factor to consider. If the expenses of repairing the car after an accident would possibly surpass the cost of replacing the car, but you still want protection from fire or theft, then this policy may be the best match for your needs.

  • Comprehensive insurance: Comprehensive insurance is coverage that helps to replace or repair your commercial vehicle in an incident that’s not a collision. It typically covers damage by fire, theft, vandalism, or falling objects like trees. A comprehensive policy is usually a more expensive level of cover as compared to the third party and third party fire and theft, but it does render the largest level of protection. A Comprehensive policy will protect your vehicles against any damage suffered during an accident or incident

Carrying Out Due Diligence Before Selecting an Auto Insurance Company

Choosing the right auto insurance company is crucial as it can make a huge difference to your finances. The following are a few things that we at Shimin Insurance Agency keep in mind while carrying out due diligence. They include,

  • The type of coverage: The coverage of your commercial vehicle insurance policy is important. We must make sure it covers your vehicle and all its accessories.
  • The type of risk: The type of risk your business faces will determine the type of commercial insurance you need. For example, if you carry a lot of cargo, you will need to get a cargo insurance policy as well.
  • The financial strength of the company: Before signing any commercial insurance policy, it is important to verify the financial strength of the company. You can do this by checking out the financial ratings of the company and the company’s financial statements.

The Importance of Having the Right Commercial Vehicle Insurance

Some benefits of Commercial Vehicle Insurance include 

  • Commercial vehicle insurance can be written off as a business expense and can be counted as tax-deductible.
  • This type of insurance plan can be bought in bulk by travel agencies or car rental services etc., which makes the process easier accompanied by an affordable premium amount.
  • It safeguards you from the financial burden caused by the damage due to accidents.
  • It also provides for medical costs of the injured, extending up to any other person uninsured or underinsured, driving the vehicle with consent.
  • It has a provision of the settlement amount for losses incurred due to unforeseen events such as theft, fire, vandalism, terrorist attacks, natural calamities, etc.
  • It covers the lawsuit and legal fees that are brought against you. 
  • It has extra benefits for any deaths caused during accidents.
  • When there is no claim within the policy period, no claim bonus is awarded during renewals.
  • It gives financial assistance to compensate for third-party penalty claims.

Commercial Vehicles that Require Motor Vehicle Commercial Insurance in Kenya

As mentioned in the introduction, every commercial vehicle requires an insurance policy. However, only certain types of commercial vehicles need motor vehicle commercial insurance in Kenya. They include;

  • Passenger Carrying Vehicles Vehicles such as taxis, cabs, school buses, private buses, etc., that generally carry at least one passenger are known as passenger-carrying vehicles(PSV). These passenger-carrying vehicles are covered under commercial vehicle insurance, which secures them against losses in case of any unforeseen circumstances.
  • Goods Carrying Vehicles Vehicles primarily used for carrying goods to transport from one place to another are known as goods carrying vehicles and mostly include mini trucks, trucks, lorries, etc. Since these vehicles are large, they carry more risk. Commercial vehicle insurance covers the damages to the third-party vehicle or own vehicles and the damages to the goods as per the policy coverage.
  • Miscellaneous & Special Vehicles There are many types of vehicles used for business or commercial reasons besides trucks, taxis, buses, cabs, etc. The vehicles may include special vehicles used for mining, farming, construction, etc. Commercial vehicle insurance shields the insured vehicle from any mishaps and losses caused to and by the vehicle and its perspective driver.

How you can get the right commercial insurance

You can contact us at Shimin Insurance Agency and we could help you compare different policies offered by our different trusted partners. You get different rates depending on the vehicle type, the vehicle’s intended use, and so on. You can narrow down which companies and policies you think might suit you best.

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