Business News Kenya

Wednesday, 9 December 2015

Reasons why your car insurance claim may be rejected

You have insured your car, then it is maybe stolen or damaged, you place a claim which is then rejected. I have compiled some of the reasons why car insurance companies may reject a claim.

It is disturbing when your vehicle is damaged and even more painful when your insurer refuses to compensate you because your policy doesn’t cover for what caused the damage. This is so because Insurance protects people against unexpected events and that are stated in the policy.

However, circumstances do happen when an insurer refuses to settle a claim because of an omission or breach of policy condition. Even when insurance protects you even from a loss that may have been caused by your own negligence, it will however not cover for gross negligence. For example, when the insurer can confirm that you deliberately ignored a situation knowing very well that a loss was likely or probable.

Reasons why your insurance claim may be rejected  

Driving under the influence of alcohol or drugs Motor insurers will not agree to pay out if the loss occurred when you were driving under the influence of alcohol or been tested positive for misusing drugs. Some insurers further reject a claim if the person you lend your car to was under the influence even if you had no idea.

Suspended or cancelled license Your insurer will not compensate you if they find out that you do not have a valid driver’s license at the time of the accident. Insurers will consider this as you contravening the law and insurance does not cover for any illegal activity. Some insurers will go further and reject a claim if a person you lend your car to is unlicensed even if you didn’t know it.

Allowing a friend to drive a vehicle If you allow a friend or anybody to drive your car without informing your insurer, you may end up footing the bill for an accident. This is because some insurance providers restrict driving to nominated drivers.

You MUST report accidents

Failing to report an accident to the traffic police within 24 hours after you are involved in an accident or if your car has been stolen may lead to your claim being rejected. 

Not taking your car for inspection, or if you are insuring a newly acquired or used car or have decided to change insurance companies you need to take your car for inspection. They need to see that your vehicle exists and is not damaged. Failure do this, your claim may be rejected.

Failing to install security devices on your car may lead to claims rejection but this is limited to some and not all insurers. Some insurers will not compensate your loss if you haven’t installed the standard security devices in your vehicle that they require, like an alarm and immobilizer or a tracking and recovery system. 

Car modifications can lead to claim rejections

Car modifications: You may be required to inform your insurer whenever you modify your car to change its performance. Insurers need to know for example, when you have modified the engine because this may affect the rate that is charged. If you have for example installed a new sound system, mags or other accessories, these may not be covered unless you advise first.

Driving across borders: Some insurance providers may not cover for loses occurring when you drive beyond the territorial limits stipulated in your policy. Most insurers will only cover you within the Kenyan boarders and within the immediate surrounding countries. If you plan to drive out of the territorial limits of your policy you need to have cover extended for where you are going.

Using a vehicle for business purposes: Confirm with the “use description” that apply to your vehicle carefully because insurers differ in their user descriptions and you may not have the cover that you think.

 For instance Private Use may include driving to and from work and attending to the infrequent meetings but some wordings do not. The idea here is that you need to be able to get a sense of how far the vehicle will be driven.

Read the fine print when you take out car insurance

The above list is by no means comprehensive it is very important to read and understand the small print on your insurance policy. Once you have read and understood the policy and you are still not happy about your insurer’s decision not to settle your claim. Wait until you get a policy with terms you side with.

 Kenya Traffic rules are unfavorable

The recent amendment of the section 12 of Cap 403 of the law of Kenya caught many car owners off guard. The president went ahead and signed the amendments into law meaning they are operational from then and can be effected.

To get you on the safe side I am making sure you understand the implications and the changes made as a cushion to our beloved clients. 

 Number plates: Let’s say you want to sell your car, there is a new procedure governing that because you will have to surrender the plates to the registrar of motor vehicles and. On the other hand, if you again fail to renew you’re the insurance cover, you also need to remember to surrender the plates to the registrar or else, you risk being arrested and fined.

   When on the road, many are the times you have seen Matatu drivers and motor cycle riders overlapping and using the wrong lanes. If this new rule is obeyed, this will be history. The new law stated that Overlapping, Obstruction, driving through a petrol station to avoid traffic and driving on the pavements attracts a 100,000 to 300,000 Shillings fine, a one year jail term or both. 
   Over speeding is also one serious offense in the traffic laws of Kenya as it attracts a 10,000 shillings fine, three months in jail or both. The Kenyan traffic laws have put a speed limit of 80 Kph as the maximum speed on major roads. You also need to understand that some accidents occurring due to careless driving and over speeding are not compensable for insurance. Just be cautious.

   The common careless driving is also being taken seriously as from the new law; it attracts a 500,000 shillings fine/10 year jail term or both. The same applies to the offense of Driving under the influence of alcohol.
   For PSV operators, both the drive and the conductor need to always be in uniform and badge rules or else face serious offenses.

  Motor Cycle Riders are restricted to one passage per ride and both the rider and the passenger need to have a reflective jacket and helmets otherwise they risk being fined 10,000 Kenya shillings in default or 12 months imprisonment.

Furthermore, road blocks are to be gazetted prior to being set up by the traffic police department. On the other hand, the driving licenses for speed limit violators will be suspended for not less than 3 years if the person exceeds a speed limit of by over 10kph and the offense repeated 3 times or more.
For the passenger, you need to have the safety belts on at all times.

It will be mandatory for all licensed drivers to go for eye checkups every three months and if you fail the test your license will be withdrawn.

To effect the law, all law enforcers (the regular police and APs) are effectively mandated to deal with traffic issues with the abolition of the Traffic Department under the Kenya Police Service Act.

This important not only for drivers but also car owners since accidents and losses accrued from carelessness and deviation from the law are not compensated. 

I therefore advice you to be careful while on the road and effect the new rules for both your safety and the safety of your passengers. 

Feel free to give feedback and ask any question related to Insurance and your safety on the road.

Be safe

The insurance claim process.

More than 15 Million motor vehicles clog the Kenyan roads today, making it likely that someday you will have an accident and file an auto insurance claim. The good news however is that in most auto accident claims, personal injury is not the problem.

Although a personal injury claim may require a different level of proof and persistence than a vehicle damage claim and insurance regulations vary according to the insurance provider but the basic steps to place a claim are fairly similar.

Every insurance claim requires a proof of damage or injury before a carrier will pay. On auto claims, there are five elements of proof that comes into play: what you tell the insurance companies, what the other party tells them, a police report, witnesses and physical damage at the scene.

The claim process.
In Kenya, universally, the claim has to be reported to the Insurance cover provider in 7 days but to the broker/agent immediately. Many people have lost their claims due to small mistakes as this. In this issue, we have highlighted the “dos and Don’ts” when making a claim

The do’s (procedure)
  • Immediately you get an accident, the first thing to do is, mark the positions of the loss/site indicating all positions just in case the other party decides to leave before the arrival of the police.
  • All this time, you are not supposed to accept liability but refer the loss to your agent for further action.
  • Call the police so that you can have them inspect the loss and probably give you an abstract as this will be necessary for lodging your claim. (In Kenya, the police can be reached through the 911/999 emergency numbers. However, depending on the police posts near, you can have specific numbers for reporting any emergencies.
  • You then need to obtain a reference number (Abstract) from the police which you then will have to submit to the agent. (The abstract contains the inspection report which the agent will use to report to the Insurance provider)
  • After this, you then call your insurance agent and report the loss as it is. That way, the agent will be able to record this and file this loss awaiting a report on the total loss.
  • All this time, you need to ensure your safety by standing at a clear place to avoid further harm to you, plus, you need to have your hazard lights on as well as other alerts to indicate a hazard ahead.

  • Never remove the vehicle from the scene of the accident before the police arrive as this will nullify your claim.
  • ·         Never accept liability but always report this and refer to the insurance agent. You may also not apologies-EVER. Do Not Apologize to Anyone at Anytime. That does not mean that you cannot express empathy for any injuries to others, but an apology can be turned into an admission by an insurance adjuster.
  • ·         You should not commit anything in writing unless the police are present. Doing so, especially if you do this in a huff will affect the way you make your decisions.
  • ·         Don’t commence with the repair before taking pictures or a report of assessment from accredited/qualified assessors.
Quick pick.

  1. ·         Report the loss within 48hrs and not later than 7 days:
  2. ·         Report to the police
  3. ·         Notify your agent
  4. ·         Obtain a reference number and assessment report from the police
  5. ·         The following documents should be forwarded thereafter.
  6. ·         Well filled claim form
  7. ·         Copy of driver’s license
  8. ·         Copy of P.S.V license (If the m/v is a P.S.V)
  9. ·         Motor Inspection(If any injuries/damages to Third Parties