Understanding Motor Vehicle Insurance in Ghana: Types, Benefits, and What to Do When a Claim Occurs

Understanding Motor Vehicle Insurance in Ghana: Types, Benefits, and What to Do When a Claim Occurs

Motor vehicle insurance remains one of the most important financial protections for drivers and businesses in Ghana. It not only safeguards vehicle owners against loss or damage but also ensures that third parties who suffer injury or property damage are adequately compensated.

In Ghana, motor insurance policies apply to all categories of vehicles — including private cars, commercial vehicles, trucks, tankers, pickups, and forklifts. The various types of coverage available can be grouped under three main headings:

1. Comprehensive Cover

A comprehensive motor insurance policy provides the widest protection. It covers:

• Loss or Damage to the Vehicle:
  This includes accidental collision, overturning, fire, or theft. The insurer will either repair, replace, or compensate for the damage, depending on the severity.
• Liability to Third Parties:
  Comprehensive cover also protects the insured against legal liabilities arising from:
  • Death or bodily injury to any person caused by the insured vehicle.
  • Damage to third-party property.

In Ghana, the statutory limit for third-party property damage is GH¢2,000, as stipulated under current insurance guidelines. However, it is strongly recommended to increase this limit for a small additional premium to ensure adequate protection, especially for vehicles operating in urban or high-risk areas.

2. Third Party, Fire, and Theft Cover

This cover is slightly limited compared to comprehensive insurance.
It includes:

• Protection against fire and theft of the insured vehicle.
• Third-party liabilities in case the vehicle causes death, injury, or property damage to others.

This option is ideal for vehicles of moderate value or for those who may wish to balance cost with essential protection.

3. Third Party Only Cover

This is the minimum legal requirement for all motorists in Ghana under the Road Traffic Act, 1958 (Act 42).

It provides protection only against:

• Third-party injury or death, and
• Third-party property damage (subject to the statutory limit).

It does not cover damage to or loss of the insured’s own vehicle.

Premiums and Rating

Premiums for motor insurance are based on:

• The value of the vehicle,
• The type of cover selected, and
• The Third-Party Property Damage (TPPD) limit chosen.

As a guide, the market rate for a comprehensive motor insurance policy in Ghana is generally between 5% and 7% of the insured value of the vehicle.
Third Party or Third Party, Fire & Theft policies attract significantly lower premiums.

When seeking quotations, insurers usually require:

• A list of all vehicles and their respective current market values.
• Vehicle registration and chassis numbers.
• Any existing claim-free or no-claim discount documentation from your current insurer.

What to Do When a Motor Insurance Claim Occurs

In the event of an accident, fire, theft, or other insured event, it’s important to follow the proper claims procedure to ensure smooth and timely compensation.

Here are the key steps required in Ghana:

1. Notify Your Insurer Immediately

• Contact your insurance company or broker within 24 hours of the incident.
• Provide the policy number, vehicle details, and brief description of what happened.

2. Report to the Police

• For accidents, thefts, or any incident involving injury, a police report is mandatory.
• Obtain an official police report or extract, which forms part of your claim documentation.

3. Do Not Repair the Vehicle Without Approval

• Wait for the insurer’s claims officer or assessor to inspect the vehicle.
• Unauthorized repairs can lead to delayed or rejected claims.

4. Complete the Claim Form

• Fill out and submit the motor claim form provided by your insurer or broker.
• Attach supporting documents such as:
  • Copy of driver’s license
  • Vehicle registration certificate
  • Police report
  • Repair estimates or invoices
  • Photographs of the damaged vehicle

5. Cooperate During Assessment

• The insurer may assign a loss adjuster or assessor to evaluate the damage and determine the compensation.
• Respond promptly to any request for clarification or additional documents.

6. Settlement

Once liability and coverage are confirmed, the insurer will:

• Authorize repairs, or
• Pay compensation directly to the insured or a garage, depending on the policy terms.

Key Advice from Experts

According to leading Ghanaian insurance brokers, many claim delays occur because drivers fail to report incidents promptly or submit complete documentation.
Mr. Kwame Ofori, a licensed insurance intermediary, emphasizes:

“A well-documented claim, with proper police and repair reports, can be settled within a few weeks. The biggest cause of delay is incomplete or inaccurate information from the insured.”

Conclusion

Motor insurance is not just a legal requirement — it is a financial safety net that protects lives, property, and livelihoods.
Whether you choose Comprehensive, Third Party Fire & Theft, or Third Party Only, ensure that your policy is active, updated, and well understood.

And when a claim occurs, remember: quick reporting, accurate documentation, and full cooperation are the keys to smooth and successful claims settlement.

By: InsureGhana Editorial Team
Source: National Insurance Commission (NIC), Road Traffic Act 1958 (Act 42), and market insights from Ghana’s motor insurance practitioners.