Blow to motorists as court declines to suspend 50 per cent hike in motor vehicle insurance premiums

Motorists have been dealt with a major blow after the High Court declined to suspend the planned increase of premiums for motor vehicle insurance by up to 50 per cent.

However, Justice Anthony Mrima certified the case filed by the Kenya Human Rights Commission (KHRC) as urgent and directed parties to appear for directions next week.

The petition filed through lawyer Kelly Malenya, KHRC described the new terms as illegal, punitive and a violation of consumer rights.

“Considering the mandatory nature of motor-vehicle insurance the said actions of insurance companies are discriminatory, unjustified and illegal. The said actions also amount to a violation of consumer rights and are punitive, insensitive and oppressive,” read court documents.

KHRC argues that the planned increase of premiums is illegal because there was no public participation.

The Commission claimed that unless the court intervenes and halts the changes, consumers will continue to greatly suffer from the said acts of corporate impunity.

Further, KHRC has accused the Insurance Regulatory Authority (IRA) of failing to protect the public and policy holders from such increase.

Insurers opted to increase vehicle premiums by 50 per cent starting this year, a move that is supported by the IRA.

The increased pricing will increase the comprehensive cover of private and commercial vehicles by almost 50 per cent depending on the insurer.

Most insurance companies have indicated that they will no longer offer comprehensive cover for cars aged more than 12 years.

Those with vehicles valued at less than Sh1 million will be the hardest hit after insurance companies announced a minimum premium of Sh45,000.

Insurance companies argue that they have raised their rates because the business has been a loss-making venture due to fraud and price undercutting.