[Kenya] Fake motor vehicle claims hold back insurance sector growth
Insurance firms in Kenya have tightened the procedure in paying motor vehicle claims to check on fake cases which are posing a challenge to the sector.
Apart from those insuring their vehicles undergoing a rigorous documentation process, almost all underwriters have sought independent investigative consultants to check out for them indeed if the claims their clients are seeking to be compensated are genuine.
Statistics indicate that in every 10 motor vehicle insurance claims, one stands out as false.
Industry players now argue that the only way out of this problem is to put down in pen and ink, stringent rules that will guarantee more responsibility in the industry. Lack of integrity they say, has given birth to the culture of dishonesty where those insuring their vehicles do not want to take responsibility on their part.
In the face of good terms of compensation as competition balloons in the industry the sky has become the limit in the con game. In one instance in Nairobi Kenya, a woman parked her car in a well-protected area. When the car was taken away through a well-organized syndicate, she claimed it had been stolen.
However the insurer found some loose ends in the claim for compensation, prompting it to do some investigations. The investigations revealed that the theft had been stage managed with the intention of selling the alleged stolen car.
Others daringly stage manage an accident, and then go home happily in the knowledge that they have struck a deal with their insurer.
Now insurers say interventions that would work in curbing the menace would be to raise the benchmark for declaring a motor vehicle as a write off from that of 50 percent to that of 70 percent. This they say would mean that anyone attempting to stage manage a car theft so that they can be compensated would readily grapple with a life or death matter.
Public service vehicle operators, reportedly working in collusion with some rogue police officers, doctors, victims of accidents and lawyers, have devised fraudulent schemes that have seen eight public service vehicle underwriters wind up.
As Kenyans prepare to pay for higher premiums, they are looking up to the industry’s regulator, the Insurance Regulatory Authority to eliminate the crime in the vital sector to enhance growth.
