Insurance premiums for HOWO and FUSO trucks increased by 150%,The Central Bank has clarified that the surge in accidents has led to a 150 percent surge in insurance premiums for HOWO and FUSO trucks.
During a press conference on Thursday, Central Bank Governor John Rwangombwa explained the reason behind this increase. He highlighted that insurance premiums for certain vehicles have experienced a significant rise since April of this year, while premiums for other vehicles have decreased.
Rwangombwa pointed out that there has been a notable increase in accidents over the past two years, resulting in higher costs for insurance companies. The losses incurred by these companies have escalated from Rwf2.6 billion to over Rwf4 billion. The decision to raise insurance premiums was a measure taken to recover from these losses, as insurance costs are determined based on risk assessment.
Additionally, the inflationary impact on the international level has also played a role in driving changes in insurance costs, particularly due to the increased prices of expensive spare parts.
Rwangombwa mentioned that third-party insurance premiums for certain vehicles have risen by 50 percent. Third-party insurance provides coverage against losses caused by a third party, such as automobile insurance that compensates the insured if their vehicle is damaged by another driver.
However, he disclosed that third-party insurance premiums for HOWO and FUSO trucks had to be increased by 150 percent due to their higher frequency of accidents compared to other vehicles.
Conversely, insurance premiums for high-capacity buses have seen a decrease of 50 percent, and Omnium insurance premiums have also decreased for most vehicles. Omnium insurance covers the insured for material damage resulting from an accident, regardless of fault.
Nevertheless, Rwangombwa noted that Omnium insurance premiums for HOWO and FUSO trucks have increased, as insurance companies conducted risk assessments and found that they were facing losses. Increasing insurance costs was the only viable option to recover from these losses, he explained.