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Matatu PSV Insurance Companies in Kenya

Posted on 2018-10-04 in: Car Insurance in Kenya
Matatu PSV Insurance Companies in Kenya

Matatus are the most common means of public transport in Kenya accounting for over 70% of travel in urban areas like Nairobi. The Matatus are commonly built from Nissan and Hyundai bodies which are assembled by most of the bus body buildings in Kenya like the KVM, Banbros, KCI body builders and others. Matatus ply different routes within the city and some of the popular suburbs outside the city centre. Matatus are commonly classified under the informal sector because of the nature of the business, cash is collected for the fares and many digital initiatives have failed to take off. In efforts to make the Matatus industry cashless many leading banks in Kenya and global tech giant Google have nonetheless failed to move the industry online. Popular among these is the long failed project BebaPay created by Google that failed to take off.

Typical Matatus carry about 14 to 28 passengers plying some popular routes like Rongai, Eastleigh, Embakasi and more. These PSV vehicles are custom fitted with different types of seats, music systems as well as LCD screens for passenger entertainment. A nascent industry has developed around customising these vehicles where awards are now given out to titles like 'Best Matatu of the Year', 'Most Pimped Matatu of the Year', 'Hottest Matatu in Nairobi', etc. Most of the public opinion around Matatus is the menace they cause on the roads, poor and reckless driving which has led to countless damages to other vehicles on the road, third party property damage, loss of lives and bodily harm to passengers and other members of the public.

As such the rate of losses is very high on this transport sector and therefore insurance companies in Kenya have shied away from insuring vehicles that are operating as Matatus. The biggest insurance liability is the third party bodily injuries and deaths arising out of accidents as well as the passenger legal liability. These eventually end up in court and the insurance companies are forced to pay hundred of millions of shillings to the claimants. This segment is reported together with the commercial segment is the AKI Annual industry report with the 2 leading providers of this class of business recording premiums of KSh 5.1 billions, an equivalent of USD 51 millions.

Invesco Insurance

Invesco Assurance is perhaps the leading PSV Matatu insurer in Kenya with branches in over 27 locations countrywide. In addition to being known for Matatu insurance, Invesco also offers the following insurance products; commercial vehicles, private vehicles, PSV taxi, fire and allied perils, Workers Injury Benefits Act (WIBA).

Directline Insurance

Directline Assurance Company is the undisputed leader in PSV Matatus and Bus insurance in Kenya. It has sorely concentrated on the motor insurance business segment of the market. It offers the following products exclusively PSV Matatu, PSV Bus, Taxi, Commercial Motor, Private Motor. With over 17 branches country wide, Directline has an annual turnover of over KSh 3.2 billions putting it among the top 5 car insurance companies on the market. For a list of the top car insurance companies in Kenya, check out our blog post. The company is headquartered at Hazina Towers, 17th Floor, Monrovia Street, Nairobi and has branches in major cities like Kisumu, Eldoret, Embu, Machakos and others.

Matatu insurance rates

The premium rates for this insurance segment is something that is not commonly shared because of the fact that it is only offered by two insurance companies list above. Previously, AMACO insurance had offered the cover for PSV Matatus but pulled out of the business segment arising out of liabilities and property losses. Around 2016, AMACO pulled out of the business segment and has opted to focus on the other general insurance products to the Kenyan market. Most insurance reports in the media also point to the high fraud in the market.

The Matatu/PSV insurance product is split into the comprehensive part and also the third party cover.

The comprehensive covers the assets itself from damages and also the different accessories both inside and outside the vehicle. This is similar to the cover that is common for other vehicles like the private car insurance and also PSV chauffeur driven insurance.

The below table shows an example of a MATATU PSV insurance quote for 11 passengers vehicle commonly used in Nairobi

Matatu Value 1,000,000
Cover Comprehensive
Premium Value 140,294
Excess Protector 5,000
PVT 0.000
Training Levy 291
Policy Holder C Tax 363
Total Insurance Premium 145,948

While the above table shows the rates for the comprehensive cover, it does not cover the third party liability and also the passenger legal liability. These are perhaps the biggest type of risks. This part of the cover is priced separately and depends on the number of passengers that the Matatu/Bus carries. As for the above example of the 11 passengers Matatu, the rates for the third party cover will be KSh 90,700 for the annual premiums, which may be paid as a one off, in 3 instalments, down all the way up to weekly premiums payments.

Therefore, this brings the total cost of the Matatu insurance to KSh 236,648.

Compare to the rates for private cars or PSV vehicles, it is clear the Matatus have by far the highest pricing for motor vehicles.

For a Matatu owner, it is clearly a high cost to bear and that is why some Fintech companies have stepped in to provide flexible payment methods. A small start-up has also come in to offer daily payments for the Matatu industry making the lives of the operators much easier.

Requirements for PSV Matatu/Bus insurance

      Copy of the proposer's PIN Certificate
      Copy of National ID card of the insured/Sacco name ,certificate of registration or Certificate of Incorporation
      Copy of the Logbook
      For Comprehensive cover, A valuation facilitation letter will be issued by the insurer to the panel of approved valuers.
      The age of the vehicle (10 years) is also considered as an important factor for underwriting, and as such the insurer has the option to either accept or decline business on this basis.

If you are looking for an insurance cover for your Matatu or any other PSV vehicle, check out our detailed guide on PSV insurance rates and find out how much you could potentially save, reach us on our contact details below or simply visit our offices;

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