Insurers want KCC to review palm trees compensation procedures

Insurance companies have called upon Kigali City Council (KCC)  to review the settling of claims  involving motorists who damage the city’s palm trees lined up along the major streets in the city,  in order to align such processes with  the established standards and procedures of the insurance industry. 
Palm trees that line the streets of Kigali are the subject of the compensation debate  between Insurers and Kigali City Council. The New Times / File photo
Palm trees that line the streets of Kigali are the subject of the compensation debate between Insurers and Kigali City Council. The New Times / File photo

Insurance companies have called upon Kigali City Council (KCC)  to review the settling of claims  involving motorists who damage the city’s palm trees lined up along the major streets in the city,  in order to align such processes with  the established standards and procedures of the insurance industry. 

Currently, KCC charges motorists who damage each palm tree a fixed sum of Rwf1 million through a process that does not involve insurance companies. Since most motorists insure their cars against such risks, insurance companies now want KCC to realign their damage policy for the palm trees to directly involve insurance companies. Whoever knocks down a palm tree,  police confiscates the car until the set fine of Rwf 1 million is paid to KCC.

 “We are supposed to pay for damages and not fines or penalties. The difference is that fines or penalties are not insurable while damages are,” said Gaudens Kanamugire Deputy General Manger of Operations in Phoenix Insurance company.

 He adds; “there is an element of penalty in this amount asked by KCC for each damaged palm tree.” He added that under a normal compensation procedure, after a motorist is reported to have knocked a palm tree, KCC is supposed to report the damage to the particular insurance firm for compensation and the company assigns an expert to evaluate and pay according to the damage evaluated.

Information available indicates that a palm tree costs between Rwf10, 000 and 60,000 while if maintenance would be factored in, the amount would go to Rwf300,000.

End last year, insurers held a meeting with Private Sector Federation(PSF), investors and KCC where the same problem was addressed and KCC promised to reveal contract details it had with the firms that  supplied and maintain the palm trees. 

“Palm trees are very expensive, and their maintenance is approx Rwf7 million per month, however KCC accepted to provide insurance companies with contract details,” part of the minutes of the meeting that brought together insurers and KCC reads.

The insurers claim that to date, KCC has not revealed the contract  details. “How do we pay for such a very high figure without set evaluation procedures being conducted ? If anything, our auditors would not allow this to happen, meaning that there is no way such payments can be made unless KCC gives us the details about how they came up with Rwf1m,” observed Peter Claver Nkurikiyinka,  the Claims and Legal Director of Société Rwandaise d’Assurances ( SORAS).

 At SORAS , officials say that  there are more than 10 of such cases, that are pending and the company adds that the maximum it  can cover is Rwf100,000 per tree. 

“Clients with the capacity to pay the KCC fine do so in order to get their cars back, but for those who do not, it seems that such  cars are known to have stayed for long at police lines prompting authorities to have them auctioned,” he said.

 Insurers say  that they are still in discussion with KCC to solve the problem, and are optimistic that a fair compensation package can be worked out. When contacted KCC communications director Bruno Rangira did not respond to our request for an official comment on the matter promising to  call back later on.

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