The Central Bank has explained that the rise in accidents has triggered a 150 percent increase in insurance premiums for HOWO and FUSO trucks.
Central Bank Governor John Rwangombwa explained the increase during the press conference on Thursday.
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He stated that there has been a significant increase in insurance premiums for some vehicles since April of this year, while insurance premiums have decreased for others.
"Accidents have increased in the past two years, and the costs incurred due to them have also increased. The losses incurred by insurance companies rose from Rwf2.6 billion to over Rwf4 billion. Increasing insurance premiums was a measure to recover from such loss,” he said, noting that insurance premiums are based on risk assessment.
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He added that due to inflation at an international level, expensive spare parts have also triggered changes in insurance costs.
"Third-party insurance premiums increased by 50 per cent for some vehicles,” he said.
Third-party insurance covers an individual or firm against a loss caused by some third party.
An example is automobile insurance which will indemnify the insured if another driver causes damage to their car.
However, he disclosed that third-party insurance premiums for HOWO and FUSO trucks had to increase by 150% as they had many more accidents compared to other vehicles.
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Rwangombwa, meanwhile, said insurance premiums for high-capacity buses decreased by 50 per cent. He added that Omnium insurance premiums also decreased for almost all vehicles.
If you take out Omnium insurance for your vehicle, your insurer will reimburse you for material damage resulting from an accident, whether or not you are at fault for the accident.
On the contrary, omnium insurance premiums increased for HOWO and FUSO trucks, he said.
"Insurance companies carried out risk assessments and found that they were incurring losses. The only choice to seek a way to recover from the losses was to increase insurance costs,” he said.