Matatu Saccos sue insurance companies over increased premiums

The Invesco Assurance Company Limited and Direct Line Assurance Company Limited have asked the court for more time to put in substantive reply to claims by Matatu Welfare Association over the alleged abrupt increase in PSV insurance premiums.

Over 100 matatu Saccos moved to the High Court to question the action by Invesco Assurance Company Limited and Direct Line Assurance Company Limited to increase monthly insurance charges for matatus without their involvement.

The Matatu Welfare Association, through advocate Evans Ondieki, in the court papers, contented that they only came to realise that insurance charges were increased when they went to make monthly payments.

The petitioners allege a 15% increase in monthly premiums from the initial charges.

They allege that as stakeholders in the business, they ought to have been consulted before sealing the deal.

It is alleged the insurance companies have cited the increased number of accidents in the country with the PSVs as their main reason of hiking insurance charges.

The effect of the increased insurance payments might result to increase of fare paid by passengers to compensate on the charges by the insurance.

The matatu Saccos, therefore, want the court to issue temporary orders restraining payments of the already effected charges pending hearing and determination of the matter.

Insurance Regulatory Authority and Association of Kenya Insurers are also sued in the case.

The matter will be heard inter-parties on December 13, 2016.