July 27th 2010
"Claims that arise from the psv covers are fictitious in addition to their repeated occurrence which translates to heavy losses to insurance companies" Mr Makori.
By Khalwale James
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A PSV vehicle operating in Kisumu town picks up passengers at the Kisumu main bus terminal. Insurance companies are fearing to invest in this industry because of percieved losses. Picture by Khalwale James
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Public service motorists are likely going to suffer rejection from insurance companies over exaggerated claims allegedly made in seeking risk compensation. Amaco insurance Nyanza branch manager Mr Richard Makori yesterday said many claims that arise from the psv covers are fictitious in addition to their repeated occurrence which translates to heavy losses to insurance companies.
Though he admitted that psv owners pay premiums promptly, investment into their cover is likely going to be faced out with time with current coverage maintained at less than 40 percent adding that companies that entirely depend on covering psv have a negligible future.
This may not only spur losses to third parties in case of accidents but also lead to heavy financial load to motor owners if the claims are made realty.
While exclusively speaking to nation, Mr Makori attributed the trend of fictitious motor accident claims this to the low employment rates in the Nyanza region.
"They have a cartel of lawyers who rush to accident scenes to file cases in court to get compensation. That's not a problem, but mostly such pleas indicate injury to all when sometimes only half of them deserved compensation," said Mr Makori.
"That is why we are still strong on the market as others fall because we try as much as possible to keep our psv covers low as possible on our lists," uttered Mr Makori.
But it is a requirement by law that passengers get compensation after an accident making traffic law enforcers to arrest vehicles operated without updated insurance policies.
If motor insurance is absconded by private insurers, the sufferers will be the public members who travel via the vehicles in events of an accident because they will be unable to meet medical bills and other expenses accruing from injuries sustained.
Whereas it is difficult settling claims in Kenya especially on motor insurance, Mr Makori said that delays and rejection of claims is usually blamed on insurers when at times the insured persons should carry the cross.
He said late reporting of claims after an accident or lack of any of the crucial documents required for processing jeopardize the settling procedure sometimes leading to the extension of the required 90 days period
