Motorists will pay up to Sh3,000 through their annual car insurance to cover for damages of road assets if amendments to law are adopted.
The Kenya Roads Board (KRB) is seeking to set aside between Sh500 and Sh3,000 from the annual third party covers to be spent on replacement of damaged road infrastructure like signage, guardrails and streetlights during accidents.
The amounts will be varied depending on the engine capacity of the car being insured with the scheme set to generate more than Sh10 billion every year.
KRB acting managing director Rashid Mohamed said the move will require an amendment to the Insurance Act to remove the compensation for road assets from the third party covers and introduce the fees.
The fees will be remitted to KRB.
“It does not necessarily mean motorist will pay more because the amount is already covered in the current third party insurance fees. It will only be set aside to make it easier to access for use in replacing damaged road assets. It is currently costly and time consuming to seek compensation for a damaged road signage for example,” Mr Mohamed said.
The proposal has been forwarded to the Insurance Regulatory Authority for scrutiny.
The proposed law change will effectively see a portion of what motorists give to insurance firms to cover third party assets chopped and given to the road agencies, a move that has attracted strong criticism from underwriters.
The Association of Kenya Insurers (AKI) executive director Tom Gichuhi questioned the rationale that will be used to apportion the specific amount to cover road assets from the premium paid by motorists in the third party covers.
“Third party covers a lot other things including the other vehicles on the road, houses, bicycles and the other road assets like street lighting. How will they tell the portion to take out from the premium?” Posed Mr Gichuhi.
He added that the damaged assets, whether from accidents or otherwise, are already covered by the Sh18 per litre motorists pay while buying fuel.
Business Daily
