Insurance claims in Uganda: A Critical Analysis of the Motor Vehicle Insurance (Third Party Risks) Act Cap 214

Abstract

“Insurance is an ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table” (Bierce, 1911)A total of 9,000 people lost their lives in road accidents in the last three years according to the recent Traffic Police reports while the 2017 Ministry of Works and Transport reported that at least 10 people die every day due to bodaboda-related accidents. Kiva (2018, p. 4). This is in addition to a big number of individuals who have suffered bodily injuries in road accidents and who are not usually tracked. Taking the case study of the Gaagaa bus accident which took place along Kiryandogo road, the government of Uganda compensated the families of the accident victims with shs.5,000,000/= (Five Million Uganda Shillings Only) and shs.3,000,000/= (Three Million Uganda Shillings only) for the relatives of deceased and injured victims respectively. Surprisingly, there is no indication that the motor vehicles involved in this accident were government-owned or uninsured as to entitle victims involved to compensation from the government. Besides, the amount compensated was above the statutory limit of shs.150,000/= (One Hundred and Fifty Thousand Uganda Shillings) inclusive of costs incidental to the judgment!!!The dilemma of third-party insurance compensation policy is embedded in the fact that there is a big number of victims who are not compensated as there are also many policyholders who have not benefited from the cover because they have not caused or been involved in an accident. This calls for a critical analysis of the insurance claims in Uganda in light of the Motor Vehicle Insurance (Third Party Risks) Act Cap 214 to address this injustice.This article presents the current legal framework for compensation against the insured. It analyses the challenges of insurers with the said legal framework. It recommends among others the amendment of S.39 of the Motor Vehicle Insurance (Third Party Risks) Act Cap 214 to establish a compensation policy that can benefit policyholders and to establish a Motor Insurance Information Centre which can facilitate the third-party suits against insurers.

Keywords: Third-party, Insurance, Compensation, Indemnity.

DOI: 10.7176/JLPG/110-04

Publication date:June 30^th 2021