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Motorcycle Insurance Policy: Types & Cost

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The motorcycle market in Kenya has grown exponentially in the last 5 years owing to the increasing traffic nightmare in urban centres and the low cost for the rural areas. While a second hand vehicle goes for average KSh 500,000, a new motor bike starts from as low as KSh 90,000. All the big global motor cycle brands like Honda, TVS, Hero and Bajaj have positioned themselves to take a share of the Kenyan market. From the Kenyan Traffic Act Cap 405 motor cycles just like cars require a minimum of third party insurance to operate on Kenyan road. This is mandatory and any motorcycle found without this insurance risks court fines and jail time. This is one of the areas the now famous ‘Matiangi Rules’ was tasked to reform, the issuance of motorcycle licences and the affordability of comprehensive motorcycle insurance and NHIF medical insurance.
It is estimated that there are over 700,000 motorcycle operators in the market and the number will soon reach over 1 million. The Matiangi Rules therefore was tasked with developing a comprehensive framework to govern this industry.
In this article we look at the different types of insurances available for private, commercial and PSV BodaBoda motorbikes including benefits, liability limits and costs.

PRIVATE

These are the least common classes of motorcycles on Kenyan roads. Unlike in the West where motor cycles are common means of transport, Kenyans have not yet embraced purchasing and using motor bikes for personal and family errands. In India for example, over 21 million motorcycles were sold in 2018 according to this research. The largest percentage of this is in private and family use. This figure has doubled from 2010 when just over 11 million motor bikes were sold. Kenyans have failed to embrace the motorcycle market because of lack of public infrastructure in the form of lanes specially designed for motor bikes. In addition, there is a high rate of accidents on these two wheelers which has discouraged many people.

There is a comprehensive insurance cover and a Third Party Only (TPO) insurance cover for these motorcycles. The comprehensive cover covers any accidental damage to the motor cycle and repair costs, third party property damage and also third party bodily injuries. This is different from the TPO insurance while only covers third party liabilities in the form of property damage and bodily injuries.

Insurance Costs
For this class of motorcycles, the most affordable option is the Third Party Only (TPO) insurance which goes for KSh 3,054 per annum. However, is advisable to take on a comprehensive cover which is priced at 3% of the market value of the motorcycle with a minimum premium of KSh 5,000 per annum. There are 2 important add-ons that are recommended and that is the excess protector for own damage and the political violence and terrorism cover which are charged at 0.25% of the motorcycle value with a minimum of KSh 1,000 each.

COMMERCIAL

This segment used to be the biggest one in the market before the PSV motorbikes exploded in popularity over the last three years. These are commonly used as delivery motor bikes for parcels and small goods within urban areas in Kenya. They are owned by small and big enterprises alike as well as delivery companies like Sendy, G4S, DHL and many others. They are strictly licenced to carry goods and not passengers. A new business line has since emerged which is the foods business. Spurred on by the rise of JUMIA FOOD, UBER Eats, GLOVO and many more, Kenyans are embracing fast food dining and this has rapidly grown this segment.

Insurance Costs
The pricing of the insurance for commercial is exactly the same as that for the private motor bikes discussed above. They are seen to be in the same risk category by insurers in the Kenyan market.

PSV BODABODA

This segment has seen rapid explosion with the introduction of app hailing from international and local companies like UBER, BOLT and SafeBODA. These companies have revolutionised this market and over the last 3 years, it has more than doubled in Kenya. Thanks to the unbearable traffic jams in urban areas like Nairobi, many have opted to use the two-wheeler transport to get around during the rush hours. These need a special type of motor cycle insurance cover that allows them to carry fare paying passengers with the associated passenger legal liability.

Insurance Cost
This is the most risky category of motor cycles on the road. It is for this reason that most insurance companies don’t offer cover to this category. A select number of insurers cover this class and the costs are significantly higher as a result. The TPO insurance for this starts at KSh 3,556 per annum.

The full comprehensive package starts at KSh 7,986 per annum from select insurers. It is important to note that it does not include the additional options of excess protector and political violence and terrorism cover.
Talk to us to find out more about our special BODA BODA PSV insurance cover.

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