An Illegal Insurance Practice

The last time you set your eyes on your lovely car, it was a severely twisted mess being towed away from the accident scene. It must have been painful to see your pride and joy being in that state. At the back of your mind you were not so worried. You knew that the comprehensive insurance policy that covered your car would take care of the damage. The only thing you had to do is to find the right garage to conduct the repairs on your car. The garage has been approved by Insurance Regulatory Authority (IRA) and Kenya Motor Repairers Association (KEMRA). This means that the garage provides reputable services and guarantees that your car will be properly fixed.

However, your insurer refuses to allow the garage to conduct repairs on your car as they are not approved by them. This case describes an illegal practice that has been going on between insurers and policy holders. Why is this illegal? Because such practice goes against IRA’s guidelines on claims which allows all KEMRA members including those who are not in any insurers panel of repairs to fix your car.

KEMRA on its own is recognized by IRA. This means that all its member’s garages adhere to the policies set by IRA on vehicle repair. The act also allows the insured to choose a garage of their choice provided that it is competent enough to conduct repairs and has complied with all the statutory requirements needed to conduct such repairs. The act also continues to state that the repairer of the insured choice must be a registered member of a body or organisation recognized by IRA.

The practice is ongoing and it seems to be conducted by nearly all motor insurance providers in Kenya. When KEMRA’s secretariat asked the insurers to comply to the regulations this is how they reacted;

Gateway Insurance insisted that they were not going to authorize repairs at the garage. A complication arose when it turned out that it was the broker that had brought in the car and not the Insured. Surprisingly, the Insured was not in a hurry to collect the car and so it just remained parked for weeks on end. The Member was finally given authorization to repair by the Insurer on the Member’s on own initiative.

UAP Insurance gave the Insured an option of being paid cash in lieu of repairs up to 70% only. The Insured retracted to have the vehicle repaired in his garage of choice and went by the Insurer’s choice.

ICEA Lion grudgingly accepted to repair the vehicle in a KEMRA garage chosen by the Insured and only sent an assessor after a few days.

PACIS Insurance told the Insured that they could not accept to deal with the garage of his choice and could only pay cash in lieu of repairs because the said garage had been involved in malpractices. On further investigations, it turned out that the garage had never had dealings with the Insurer before; the Member garage was asked to write back and copy IRA in on the letter.

CIC Insurance refused to authorize repairs but offered to pay cash in lieu of repairs on condition that they not be held liable for anything wrong happening to the car since they cannot vouch for repairs by a garage outside their panel. On seeing this, the Insured opted to have the Insurer have their way and tow the car to a garage of their choice.

This practice should not be allowed to continue as it contravenes the act. If your insurer refuse to allow the approved repairer to fix your car contact IRA or KEMRA for further assistance.

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