Reprieve for motorists as court stops hike in insurance costs

The high court has temporarily suspended the revised insurance premiums for motor vehicles.

Insurance companies beginning of this month effected a directive by the industry regulator Insurance Regulatory Authority (IRA) increasing insurance cover by up to 50 per cent.

The firms have also suffered another setback after the same court reversed a decision to exclude certain categories of motor vehicles from their comprehensive cover pending hearing and determination of the case.

The providers had indicated that they will no longer offer comprehensive cover for cars aged more than 12 years or those with a value of Kshs 600,000 and below.

The move to adjust the premiums has been faulted by motorists and car dealers saying there was no public participation which IRA ought to have led before allowing underwriters to make adjustments.

The Thursday ruling is a big win for Kenya Human Rights Commission (KHRC) which moved to court to challenge the decision by the regulator.

The lobby group argued that the increase was illegal because there was no public participation.

It further accused IRA of failing to protect the public and policyholders from such an increase.

The Consumers Federation of Kenya (Cofek) has been enjoined in the matter that is due for mention on 14th February 2022.

All respondents have been issued 21 days to file and serve their responses to the petition.

IRA attributed the surge in insurance to the high number of claims following a rise in accidents even as the demand for insurance increased by 19 per cent in the second quarter of 2021 to hit Ksh144.02 billion.