Treasury’s new plan to insure State vehicles

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Photo|FILE Under the insurance act, government motor vehicles are not insured because they are exempted from third-party risks during official businesses.  Nation Media Group

By JOHN NJIRU (jnjiru@ke.nationmedia.com)
Posted  Wednesday, August 22  2012 at  18:07

IN SUMMARY

• Finance Minister Njeru Githae said that it is time for the government to use reputable insurers to underwrite its cars.
• Under the insurance act, government motor vehicles are not insured because they are exempted from third-party risks during official businesses.
• This means that upon an accident or a related incident that may cause harm to a pedestrian, the government is not obligated to offer any compensation in terms of hospital fees or mortuary expenses.

Treasury has announced plans to start insuring government vehicles in what promises to hand the insurance industry billions of shillings in annual premiums.

Finance Minister Njeru Githae said that it is time for the government to use reputable insurers to underwrite its cars.

“Time has come to insure the state’s vehicles through underwriters who have knowledge and skills when it comes to these matters. 

"Through this we will be able to observe professionalism and prudence in maintaining the risks involved,” Mr Githae said during the launch of a new motor insurance cover by Gateway Insurance.

Under the insurance act, government motor vehicles are not insured because they are exempted from third-party risks during official businesses.

This means that upon an accident or a related incident that may cause harm to a pedestrian, the government is not obligated to offer any compensation in terms of hospital fees or mortuary expenses.

During the event, the minister launched the comprehensive motor insurance cover, known as “Pay-As-You-Drive” that pegs premiums on the basis of distance travelled.

Consumers will first purchase the initial third party cover and a minimum of 5000km.

They will then have their cars fitted with a tracking device, the mileage manager, which will act as a black box and will send the details of one’s journey through Global Positioning Satellite to the insurer where calculation on the insurance usage per distance travelled will take place.

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Speaking at the launch, Gateway’s chief executive Godfrey Kioi said the new cover would lower the amount of insurance payment by consumers and reduce false claims.