Kenyan Treasury is taking aim at one of the most common nightmares for motorists: having your insurance claim rejected on what feels like a technicality.
The proposed Insurance Claims Management Guidelines for 2025 would fundamentally change how insurers handle motor claims, and some of the changes are frankly overdue.
One of the headlines is that if your driving license expired the day before an accident, your insurance claim can no longer be automatically thrown out.
As long as you weren’t actually disqualified from holding a license, insurers will have to pay up. It’s a simple rule that addresses a legitimate grey area, because if we’re honest, plenty of responsible drivers have been caught out by a license renewal date they forgot about.
The guidelines also tackle the full list of reasons insurers use to dodge paying claims. If you make a late report, insurers will now have to actually document why the delay matters before rejecting your claim.
If you forgot to mention something on your application that you couldn’t reasonably have known, it will no longer be grounds for rejection either.
In addition, the new rules require every vehicle to be valued when you take out the policy and again at every renewal. That valuation becomes the basis for what you get paid if your car is written off. This is targeted at the lowball offers based on sudden depreciation calculations that appear out of nowhere when you file a claim.
Most vehicle owners are well aware of how slow motor insurance is when it comes to claims. Under the proposed rules, insurers get two working days to acknowledge your claim and tell you what documents they need. Once you submit everything, they get another two days to confirm receipt.
If liability is clear-cut, they pay immediately. If they need an investigator or loss adjuster, they have to tell you who they’ve appointed. After getting the investigation report, insurers have seven days to either make an offer or explain in writing why they’re rejecting the claim.
These timelines matter because delayed settlements are the biggest complaint against insurers. Last year, delays accounted for more than half of all complaints filed with the Insurance Regulatory Authority (IRA).
In the first half of 2025 alone, insurers rejected claims worth KES 1.51 billion, nearly double the amount rejected in the same period the previous year.
Obviously, the Association of Kenya Insurers isn’t thrilled about every aspect of these guidelines. Their general insurance manager pointed out that late reporting can make it impossible to gather evidence about whether a claim is genuine.
Fair point, but the guidelines don’t say late claims must be paid. They just say insurers can’t use lateness as an automatic rejection without documenting why it matters in that specific case.
The other contentious issue is premium payments. Under the new rules, if you haven’t paid your premium but your insurer hasn’t actually cancelled your policy, they still have to cover your claim. Even more problematic for insurers is if a broker or agent cancelled your policy without telling you; the insurer is still on the hook.
It’s easy to see why these rules have been proposed given that Kenya’s insurance penetration rate sits below 3%, while the global average is 7%. People don’t trust insurance, and delayed or rejected claims are a big reason why.
The industry has been making a fortune on technical rejections for too long, and the Treasury clearly decided the balance needed to shift. Insurers now have until early November to review the draft and submit their feedback through their umbrella body.
