envestreet financial logo

3 Concealed ways Kenyans Households are probably overpaying for their Car Insurance.

Car owners are protected and insured by insurance companies against financial loss in the event that the motor vehicle is involved in an accident, burnt or stolen.

Although the Kenya government requires motor vehicle owners to purchase auto insurance, they do not regulate insurance pricing.

Insurance companies rate their Auto insurance premiums on the basis of several key criteria.

This is due to the different actuarial formulas used by insurance companies to compute car insurance rates. They change often, making it difficult to count.

Hence, the coverage varies significantly among companies.

As a result, too many car owners are overpaying for their auto insurance.

A study conducted in 2016 by the Consumer Federation of America found that the five biggest auto insurers charged middle class and lower-class drivers more for auto insurance than wealthy drivers.

The insurance rates provided by different insurance companies are to a great extent based on a motor vehicle owner’s statistical likelihood of;

  1.     The vehicle’s make & model,
  2.     Safety features,
  3.     One’s age, sex, marital status,
  4.     Usage and driver information,
  5.     Getting into an accident,
  6.     Having a vehicle stolen or damaged,
  7.     Address, etc.

Below are three factors that you may be paying excessively for your motor vehicle insurance.

You have stuck with the same company & forgot to shop around.

Just because you have been with the same insurance company for years, it does not mean you will get adequate reward for customer loyalty. 

According to a study conducted by a personal finance Blog NerdWallet.com, the research findings showed that 38% of motorists have not bothered to compare. If not, evaluate their car insurance costs within the last three or more years.

Related Post:   How to use Life Insurance as a Tool for Creating a Lasting Legacy for Your Children.

Also, 17% of the survey’s respondents have not checked their car insurance costs at all.

With regards to the study, it shows that people with good driving habits are probably paying way too much by blindly sticking with their current insurance providers and not shopping around for alternative cheaper options.

You can do this in many ways:

Use available online tools.

There are a ton of available free websites on the internet that can help you land a super deal.

By using these available insurance comparison websites, you can get multiple quotes before choosing the right one for you.

Getting to know the different types of Insurance policies available in the market will help ensure you are getting the best rates possible.

If you believe comparing car insurance rates time to time is time-consuming for you, or it’s a complicated hassle to switch insurance companies.

Then you are definitely overpaying for your car insurance policy.

Look for discounts.

Whether you are shopping around for cheaper insurance deals or you are just re-evaluating your current insurance policy.

Make sure to ask for every one of the insurance companies’ available discounts on the table.

These may help you save even more on your auto insurance premium.

With your current policy in place, you don’t even have to wait until your policy is about to expire before exploring your options. Even if you have already paid for your semi-annual or annual premium.

Your insurance company will reimburse you for the unused coverage if you decide to switch companies.

You lack knowledge of different types of insurance coverage in the market.

The vast majority of household insurance consumers understand insurance policies that only specify one or two frameworks in their benefit provisions.

Related Post:   Protecting your loved ones: Understanding the basics of life Insurance.

However, more complex payment structures are not sufficiently understood or comprehended.

Like just about every type of insurance coverage, car insurance can vary from carrier to carrier and from motor vehicle to motor vehicle.

Many people make the mistake of purchasing an insurance policy without fully understanding the insurance coverage down to the last detail.

Before entering into a contract, you should ask yourself;

  1.     Do you know your coverages & deductibles inside and out?
  2.     Do you know who is covered?
  3.     What other options are there in the market?
  4.     For how much in damages will you be compensated in the case of an accident? 

Also, you should compare insurance costs before buying a car. This is so often overlooked by most people.

You might find out that a certain car model or type costs double the amount to insure. The bitter truth is that as long as you have the car, you will be paying for the insurance.

When someone buys a car, automatically he/she knows what he/she wants. Whether it’s a specific model or just the cheapest car available.

What many of us often forget to do, is determining the cost of  insuring each of these cars.

Increased exposure to information can lead to increase in knowledge which one can use to determine available alternative coverage.

 In general, education programs could improve the general level of insurance knowledge.

 If you inform and educate yourself about insurance benefits and or types; this could help you make more informed economic choices about purchasing an insurance policy.

You are not insuring multiple lines of coverage through the same company.

Bundling can be one of the best ways to cut on your insurance expenses. It is where you purchase more than one insurance policy with the same insurance provider.

Related Post:   Navigating the world of Insurance in Kenya: Your guide to making the right choice.

This can save you a lot of money because the insurance provider is now collecting two or more premiums from you instead of just one.

You could be losing out on discounts offered by insurance companies if you are not insuring multiple lines of coverage through the same company.

For example, you could save a good percentage on your car insurance if you bundled your home and auto insurance.

Same carriers give the most significant discounts when you Insure more than one vehicle on the same policy, and/or bundling car and home insurance with the same carrier.

Key takeaways

Keeping abreast of what other auto insurance companies have to offer is one of the best ways to know if you are paying too much for car insurance.

Checking out your policy’s features and rates frequently can give you the first clue in knowing if you are losing out on auto insurance.

Comparing other insurance companies’ rates when your policy is ready for renewal is the easiest and best time to do it. However, never let your policy lapse while you’re looking for a better deal.

As you will not only leave yourself open to both the personal liability and legal consequences of driving without insurance.

 You will surely pay higher rates to get reinstated.


 Do you have any story or press releases  you want to share? Send tips to editor@envestreetfinancial.com.

Follow us on TwitterFacebook, or LinkedIn to ensure you don’t miss out on any.

Share This Post

Like This Post


Related Posts

0 0 votes
Article Rating
Notify of

Inline Feedbacks
View all comments
Would love your thoughts, please comment.x