• By Raymond Momanyi

The Ksh. 10 Million Nightmare: What Happens When Your Car Insurance Limit Runs Out?

Picture this: It’s a typical Tuesday morning in Nairobi. You’re driving along Waiyaki Way, perhaps a little distracted by the morning radio traffic update or thinking about your first meeting of the day.

In a split second, traffic suddenly brakes ahead. You don't react fast enough.

The resulting crash is bad. It’s a multi-car pile-up, and tragically, there are serious injuries to passengers in the other vehicles and significant damage to high-end cars. The police arrive, statements are recorded, and it becomes clear: you are at fault.

In the immediate aftermath, your first thought is a sigh of relief: "Thank goodness I have comprehensive insurance."

You believe you are fully covered. But are you?

There is a terrifying gap in many standard motor insurance policies that most Kenyan drivers never think about until it is too late. It’s the gap between what the courts award a victim and the maximum limit your insurance company is legally obligated to pay.

The Scenario: The Limits of Liability

Let’s look at a realistic, albeit frightening, scenario based on recent trends in Kenyan judicial awards for road accidents.

Following the accident described above, the injured third parties sue for damages (medical expenses, loss of future earnings, pain and suffering, and vehicle repairs). The court process is lengthy, but eventually, a judgment is passed.

Because the injuries were severe and lifelong, the courts awarded a total compensation package of Ksh. 30 Million to the third parties.

You turn to your insurer to settle the claim. You pull out your policy document and look at the fine print under "Third-Party Liability Limits."

The Shock: Your standard policy has a maximum payout limit for third-party liabilities capped at Ksh. 20 Million.

What Happens Next? The Cold Hard Truth

Your insurance company will do exactly what the contract says: they will write a cheque for Ksh. 20 Million to the court or the victims’ lawyers. Their obligation ends there. They have fulfilled their policy terms.

But the court order stands at Ksh. 30 Million.

There is a balance of Ksh. 10 Million outstanding.

Have you ever asked yourself who pays that balance?

The answer is chilling: You do.

The law does not care that your insurance limit is exhausted. The judgment is against you personally as the at-fault driver. If you cannot pay that Ksh. 10 Million balance immediately, the victims’ lawyers can move to attach your assets.

This could mean:

• Seizing your savings and investments.
• Auctioning your other cars.
• Placing a caveat on, or auctioning, your land or family home.
• Garnishing your future salary for years to come.

A single accident, where standard limits are exceeded, can lead to complete financial ruin, wiping out a lifetime of hard work.

The Solution: Personal Liability Insurance

This scenario is exactly why relying solely on standard motor policy limits is a massive gamble in today's litigious environment.

The solution is what is often called Excess Third-Party Liability or a broader Personal Liability Insurance policy.

Think of it as a safety net underneath your main insurance policy.

In our scenario, if you had an Excess Liability policy:

1. Your primary car insurance pays the first Ksh. 20 Million.
2. Your Personal Liability policy kicks in immediately to pay the remaining Ksh. 10 Million balance.
3. Your personal assets, home, and savings remain untouched.

For a relatively small additional premium, this type of insurance provides millions of shillings in extra coverage, offering peace of mind that a bad day on the road won't turn into a lifetime of debt.

Don't Wait Until It's Too Late

Review your current motor insurance policy today. Check your Third-Party Liability limits. If they seem low compared to the realities of court awards in Kenya today, you need to act.

At Imana Insurance, we specialize in helping Kenyans understand these hidden risks. We don't just sell policies; we ensure your entire financial life is protected against the unexpected scenarios that standard insurance misses.

Contact us today to discuss adding an Excess Liability layer to your coverage. It’s the most important insurance conversation you haven't had yet.

Contact Imana Insurance for a Consultation:

🌐 Website: www.imana.co.ke or www.mykava.co.ke

📍 Physical Location: 4th Floor, Krishna Centre, Woodvale Grove Westlands - Nairobi, Kenya

📱 WhatsApp / Call Us: +254 796 209 402