Insurers should give clients cash to repair their vehicles. PHOTO | FOTOSEARCH
An insurance company can
settle a claim in a number of ways namely repair your vehicle,
compensate you in cash in case of total loss or give you cash to repair
your car in case you insured on a Comprehensive basis. The insurance
company giving you cash to settle an accident repair job is called
cash-in-lieu in insurance parlance.
Section 203 of the
Insurance Act Cap 487 tackles the issue of claims settlement. Ideally
insurance companies should be giving you cash to repair your vehicle and
they should not be running garages or appointing garages to repair your
vehicle. This is because their responsibility stops with them
compensating you cash for your loss and it’s your business to seek a
repairer of your choice.
This in turn removes them from
all manner of problems like legal liabilities in case of poor repair of
vehicles if they so authorized. It also removes from them unsatisfied
customers who feel they authorized repair in a bad facility that further
damaged their vehicles.
This last point has made many
insurance clients resort to third party insurance covers because they
feel the garages in an insurance company’s profile are doing shoddy jobs
and do not repair to the insureds satisfaction.
There
are also claims of company employees especially in the claims department
being compromised by the garages they work with to first of all give
low estimates of your car damages and secondly, to give a release letter
of your car to the garages for poor work done. It is thus not uncommon
to hear of an insured going back to a garage of their choice to conduct
fresh repairs on their car after it has been released from an insurance
company garage.
These unsatisfactory experiences from
insurance companies is what is making insureds resort to mandatory third
party insurance where they don’t have to seek permission for repair of
their cars from any insurance company. There’s a company where its fleet
of cars are all under third party insurance.
This of
course does not augur well for an industry that is struggling with
reputation issues.We also have another problem of rogue insurance
companies who outrightly refuse to compensate insureds in case of a
total loss or giving less compensation for the same. This is becoming a
big problem in the insurance sector and we have tens of insureds who
have hit a dead end on their compensation matters and their cries to the
regulator are not bearing any fruits. We even have companies providing
fake investigative and loss assessment reports, which I can prove, and
they do this in corroboration with some corrupt individuals at the
regulators office.
The question I keep asking is who
will save the insurance industry? This brings us to the point where
Director of Public Prosecution (DPP) Noordin Haji ordered investigations
into the insurance company that insured the ill-fated bus that killed
tens of people despite the obvious faults the bus had.
While the Insurance Act could be silent on that, the Penal Code
provides for prosecution where defaults on a vehicle can lead to loss of
lives.To quote a source, “The elements of murder as provided in Section
203 of the Penal Code which are mens rea ( malice aforethought) and
actus reus( guilty acts of omission or commission) were extended by an
amendment in 2016 which extended the elements to doing an act "
recklessly and/or negligently with indifference as to the repercussions
or consequences ".
What this means is that if you do
repair on any automobile recklessly and negligently without due regard
to the safety of the motorist or any third party and is who is
occasioned serious bodily harm or who is killed by coming into proximity
with the automobile that was repaired by you, and such death is
attributed to your recklessness or criminal negligence, the DPP can
charge you with murder contrary to Section 203 as read together with
Section 204.
Any person convicted of the capital
offence of murder shall be sentenced to death.” End of quote.I don’t
know how many insurance companies know of this provision and its
implications as they go authorising shoddy repairs for their clients’
vehicles in a bid to cut costs.
But then I hear
ignorance of the law is no defence. Insurance companies should
completely get out of the business of car repair and give cash as
compensation. The obvious implications could drive them out of business.
Washington Ndegea, chairman, Bima Intermediaries Association of Kenya (BIAK).
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