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More than One Million Vehicles Uninsured on Ugandan Roads

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Insurance Regulatory Authority - Over Two-Thirds of Ugandan Vehicles Lack Insurance: Regulatory Authority Takes Steps to Boost Compliance
Over Two-Thirds of Ugandan Vehicles Lack Insurance: Regulatory Authority Takes Steps to Boost Compliance
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According to data from the Insurance Regulatory Authority (IRA), a significant number of motor vehicles in Uganda are not insured. Out of a potential 1.7 million insurable vehicles, only 452,954 were insured in 2022. This leaves approximately 67.7 percent of vehicles on Ugandan roads without valid insurance policies.

Mr. Protazio Sande, the director of research at IRA, attributed the high non-compliance to weak enforcement mechanisms and limited resources for monitoring and penalizing non-compliant vehicle owners. He acknowledged that enforcing insurance requirements can be challenging in certain areas.

However, there has been a slight improvement in compliance, increasing to about 32.3 percent. This improvement is partly due to the digitization of motor third-party payments and better enforcement through the integration of IRA’s system with the Uganda Traffic Police’s Express Penalty Tickets (EPS) register.

Motor third-party insurance is mandatory for all vehicles, but compliance remains low. According to IRA data, 85 percent of vehicles have motor third-party policies, while 15 percent have motor comprehensive insurance. Motor comprehensive insurance covers more risks, whereas motor third-party insurance covers risks to passengers and other road users.

A study conducted by IRA from 2015 to 2020 revealed persistently high levels of non-compliance. In 2020, compliance remained at just 26 percent, resulting in substantial revenue losses for IRA and the government.

The report also highlighted indirect losses to the government, such as lost tax income and the burden of paying medical expenses for victims of accidents involving uninsured vehicles.

IRA noted that the insurance sector had experienced substantial growth in insurance policies from 2015 to 2019 due to the increase in the number of motor third-party insurance policies. However, this growth still fell short of insuring the possible 1.6 million insurable vehicles.

Efforts are underway to address this issue. IRA and other stakeholders are in the process of amending laws related to motor insurance to enhance compensation limits and increase voluntary compliance. Additionally, they are considering the provision of digital stickers to combat the use of forged stickers and exploring the possibility of enhancing penalties and sanctions against non-compliant motorists.

Motor vehicle insurance is a popular class of insurance in Uganda, generating more than Shs170 billion in written premiums, a significant increase from Shs69.8 billion in 2015. Mr. Sande emphasized the need for increased vigilance to improve compliance and ensure the protection of all road users.