What is Motor Commercial Insurance?
Motor Commercial Insurance is a type of vehicle insurance that provides coverage for vehicles used for business or commercial purposes. This includes protection against financial losses due to accidents, theft, fire, and third-party liabilities. It is mandatory for all commercial vehicles in Kenya under the Traffic Act Cap 403.
Why is Motor Commercial Insurance Important?
- Legal Requirement – All commercial vehicles in Kenya must have insurance before being allowed on the road.
- Financial Protection – Covers repair and replacement costs in case of accidents or theft.
- Liability Coverage – Protects against legal claims from third parties.
- Business Continuity – Ensures minimal disruptions in operations by covering damages and liabilities.
- Peace of Mind – Reduces financial risks associated with commercial vehicle ownership.
Types of Motor Commercial Insurance in Kenya
1. Third-Party Only Insurance (TPO) (Mandatory)
- Covers bodily injury, death, or property damage to third parties caused by the insured vehicle.
- Does not cover damage to the insured vehicle.
- Cheapest and legally required minimum cover.
2. Comprehensive Insurance (Highly Recommended)
- Covers third-party liabilities (injury, death, or property damage).
- Covers accidental damage, fire, theft, and natural disasters affecting the insured vehicle.
- Includes windscreen damage, entertainment system, towing services, and personal accident cover( optional rider) for the driver and passengers.
- Ideal for businesses with high-value commercial vehicles.
Who Needs Motor Commercial Insurance?
Motor Commercial Insurance is essential for businesses and individuals using vehicles for commercial activities, including:
- Public Service Vehicles (PSVs) – Matatus, Buses, Taxis, and Ride-Hailing Vehicles (e.g., Uber, Bolt).
- Logistics & Transport Companies – Trucks, Lorries, Tippers, Tankers, and Couriers.
- Construction Companies – Heavy Machinery, Excavators, Bulldozers.
- Car Hire and Rental Businesses.
- Delivery & E-commerce Vehicles.
- Agricultural Vehicles.
- Corporate Fleets.
Exclusions – What is NOT Covered?
Motor Commercial Insurance does not cover:
- Mechanical or electrical breakdowns not caused by an accident.
- Wear and tear or depreciation.
- Driving under the influence of alcohol/drugs.
- Unlicensed or unauthorized drivers operating the vehicle.
- Illegal activities involving the insured vehicle.
- Overloading or Misuse of the vehicle.
Cost of Motor Commercial Insurance in Kenya
The cost of insurance depends on several factors, including:
- Type of Vehicle – Trucks, Matatus, and PSVs generally have higher premiums.
- Vehicle Value – More expensive vehicles have higher premiums.
- Usage of Vehicle – High-risk usage (e.g., taxis) leads to higher premiums.
- Claim History – A history of frequent claims increases premiums.
- Coverage Type – Comprehensive cover costs more than third-party only.
Estimated Annual Premiums:
- Third-Party Only: KES 10,000 – KES 30,000
- Comprehensive Insurance: 3% – 6% of the vehicle’s market value
How to Get Motor Commercial Insurance in Kenya
- Choose a Reputable Insurer – Ensure the insurance provider is registered with the Insurance Regulatory Authority (IRA).
- Compare Quotes – Obtain multiple quotes to find the best deal.
- Assess Coverage Needs – Select a policy that suits your business needs.
- Submit Required Documents – Provide logbook, driver details, and business registration documents (if applicable).
- Make Premium Payment – Choose a suitable payment plan.
- Obtain Insurance Certificate – Ensure you have a valid insurance sticker on your vehicle.
Final Thoughts
Motor Commercial Insurance is a vital investment for businesses and individuals using vehicles for commercial purposes. Choosing the right cover ensures compliance with Kenyan law, financial security, and business continuity.
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