• P.O.Box KN3425,Kaneshie-Accra,Ghana
  • info@insureghana.com
  • +233 (0) 20 9211 579 |+233 (0) 55 301 9383
  • info@insureghana.com

Is Motor Third Party Insurance essential?

Is Motor Third Party Insurance essential?

News Date: October 7, 2019

The statistics for motor accidents are scary, and this is why road accidents are a national issue in Ghana. According to the National Road Safety Commission (NRSC), the statistics show that four (4) people die daily on Ghanaian roads due to road accident.

Estimates show that Ghana loses over 230 million dollars yearly due to road accidents, with more than 1600 deaths. The loss correlates to 1.7% of the country’s Gross Domestic Product (GDP). The NRSC announced in 2010 that there were 19 fatalities per 10,000 vehicles in Ghana. Statistics showed that 43% of the fatalities involved pedestrians and 53% involved occupants of vehicles. 23% of all pedestrian fatalities involved children below the age of 16 years.

The world we live in is full of uncertainties and risks. Risk has simply been defined as the negative outcome of an event and the variability around the expected outcome. The event of risk brings a loss. This makes most people to equate risk to cost. Occasionally, it is easier to predict the cost of the expected loss. The most difficult cost to predict is the variability around the expected cost.

These can exceed our resourcefulness and the budgeted allocation. For instance, the cost of reinstating the building and replacing the plant and machinery at a factory when there is a fire loss can easily be determined. However, it is difficult to calculate the cost surrounding the business operation, loss of profit and business continuity as a result of the same fire loss.

Consequently, there are a lot of risks or uncertainties surrounding the usage of vehicle. Motor vehicles appeared in larger number on road after the First World War. In 1909 there were less than 100,000 vehicles in Britain.

In 1919 there were 330,000 vehicles. In 1929 there were 2,130,000. There are a lot of things we buy in addition to the purchase of a vehicle. And these are additional costs we have to make plans or budgetary allocations to cater for. These risks or costs would not have been there if we did not purchase the vehicle. Kindly permit me to ask these questions. Would you pray about the following if you do not own a vehicle? That you do not use your vehicle to:

    Knock a pedestrian down and injure or kill the person in the process?
    Knock and injure or kill someone’s animal?
    Hit and destroy someone else’s property – be it building, vehicle, plant, machinery, a kiosk or any other property?
    Be involved in a crash and cause injury and death to the passengers in your vehicle?
    Cause injury or death to any member of your household through a vehicle crash?
    Cause injury or death to yourself when there is a crash?

The truth is that when you do not own a vehicle, you do not really care and think so much about these. The moment you purchase a vehicle, these questions become your primary concern. You cannot also deny yourself the comfort of owning a vehicle because of these associated risks. Risks will always be with us. We only find the best and appropriate means to manage and control them.

Another way to deal with risks is transferring them to the right and experienced institutions to manage them. This is where insurance comes in. Insurance is supposed to provide you with security and peace of mind, even though you know the risks are still there and could still happen. The reason is that the cost you would bear for occurrence of the risk is transferred to another.

By 1929, over 6,000 people were killed annually in road accidents. Many of these accident victims and their dependents were unable to recover damages because the motorist concerned in the accident was uninsured, and they were also not in a position to compensate the victims. To protect accident victims, many countries acted by making third-party liability insurance compulsory or having a security with the Accountant General. In Ghana, the Motor third-party act is Act 1958. The following are a few of the things you need to know about your motor third-party insurance Act 1958;

“Subject to the provisions of this Act, it shall not be lawful for any person to use, or cause or permit any other person to use a motor vehicle on a road, unless there is in force in relation to the user of the vehicle by that person or that other person, as the case may be, such policy of insurance or such a security in respect of third-party risks as complies with the requirements of this Act. If any person acts in contravention of this section, he shall be guilty of an offence and shall, on summary conviction thereof before a Resident Magistrate, be liable to a penalty not exceeding two thousand dollars or to imprisonment, with or without hard labour, for a term not exceeding six months or both penalty and imprisonment.”

The third-party insurance most people do not value and respect is actually very necessary and it frees the state, the citizens (passengers and pedestrians), vehicle owners, drivers and drivers’ conductors from associated costs of owning a vehicle, boarding a vehicle, using the road and driving a vehicle. The motor third-party insurance cover will pay on behalf of the insured or the driver, in respect of legal liability to third-parties resulting from an accident caused by his/her vehicle. In simple terms, the third-party is any other person except the owner or the driver of the vehicle, and the insurer will indemnify:

 Owner or any other person driving, using or in charge of the vehicle with the consent of the owner, or any authorized passenger getting in, on or out of the vehicle for:
  1.   death of or bodily injury to any person, and/or
  2.     damage to property belonging to someone other than the insured
  3.     death of or bodily injury to a member of the insured household or any other occupants
    the policy also pays compensation for the driver for bodily injury or death

Without the motor third-party insurance in place, all the cost in relation to the above would have been borne by the insured or the driver.

The citizens should come to know and accept that the primary aim of the motor third-party insurance is to help them receive fair compensation after they have been involved in a vehicle crash. The country could do its part by trying to reduce the rate of motor crashes, but it is difficult to say there will be total elimination. This is the main reason why we have to stand up as citizens and fight against vehicle owners, drivers and individuals who engage in fake motor insurance stickers. The one who is printing and selling fake insurance stickers could be knocked down by a vehicle with a fake sticker. Where will they receive compensation from?

If a driver purchases a fake motor sticker, where will you receive compensation when there is a crash. If we citizens do not bring these perpetrators who print and sell fake motor insurance stickers to face the law, we might one day find ourselves in a vehicle with fake insurance. People complain of the high cost of insurance. The highest premium one can pay for insuring a vehicle under third-party insurance is GH¢1.20 a day. But the risks associated with use of the vehicle during the day is enormous.

Remember that 23% of all pedestrian fatalities involve children below the age of 16 years. This means our children are at risk. What do we gain by selling or buying fake stickers and not doing proper insurance? We buy the vehicles, we do not insure them against third-party liabilities; we resort to fake motor insurance stickers and the statistics show the number of people who are involved in motor crashes every year – and these victims could not have been any other people than we ourselves.

If we really cherish our industry as we say, let’s do it now or never!!!!!!

The writer is a Chartered Insurer and an Associate of the Chartered Insurance Institute of United Kingdom and also Ghana (ACII-UK, ACIIG), and holds MPhil in Enterprise Risk Management and Business Consulting from Kwame Nkrumah University of Science and Technology

+233 (0) 208498571


Edited by Dr. Christopher Owusu Ansah

General Questions

There are many insurance companies that offer Life insurance and many others that offer Non-life (General) Insurance in Ghana.You can go to any of these insurance companies and take out insurance.Once you contact them, their staff will advise you on what they offer and what is best suited to your insurance need.Click to see the list of GIA accredited Life Insurance Companies and Non-Life (General) Insurance Companies.Insurance – Some Basic Steps
  • Contact an insurance company, an insurance broker or an insurance agent
  • Discuss your insurance needs with them.
  • Think     about the options carefully and then choose the product(s) that meet(s) your needs
  • Supply truthful information for the completion of the insurance contract documents
  • Sign the insurance contractPay your premium
  • Receive an insurance cover for the risk(s) you have insured.
When should you take Insurance?
Once you have life with its possible unwanted outcomes, it is advisable to take an insurance against such possible unwanted outcomes. Also, as soon as you acquire a property it is advisable to choose an insurance to cover the risk of damage or loss to the property. Again anytime you have liability to another person for any damage you may cause the person, it is advisable to insure the liability. For liability insurance in the form of third party motor vehicle, commercial building under construction and commercial buildings you are required by law to take out insurance as an owner.

Protecting your life and property should be an important part of your financial plan. Insurance protects you from financial problems resulting from damage or loss either to yourself or to your property. It is therefore important that you insure your life and property against any unanticipated accidents, damages or loss. You can take insurance to cover any of the following listed below:
  • Death
  • Accident
  • Theft
  • Fire
  • Loss
  • Damage
  • Disability Health.

Broadly there are two kinds of insurance:Life Insurance which pays an insurance benefit when the person who is insured dies;Non-Life (General) insurance, which comes in many forms, including property, liability, disability, health and travel.
  • Property Insurance provides protection against property damage and the insured is indemnified (compensated) if such damage occurs.
  • Liability Insurance provides you with insurance protection if you are found to be liable for causing damage to someone’s health or property.
  • Disability Insurance provides protection should you lose your ability to work and earn income, and pays you income if you are unable to work.
  • Health Insurance covers certain medical expenses and prescription medications.
  • Travel Insurance provides protection against certain adverse occurence during travel such as illness or even missed flights.


  • The insured (policy holder)
  • The third party whose property has been damaged by our insured's vehicle
  • The injured victim
  • Administrators of a deceased estate
  • Parents/guardians in the case of minor.

Non-motor insurance comprise of several lines example public liability, professional indemnity, personal accident etc. Each non-motor insurance claim has its own specific claims procedure and conditions.Generally, when an accident occurs the insured should comply with the following :
  • Report to the police.
  • Contact your broker/insurer and fill the specific claim form.
  • Do not settle or negotiate to settle, admit or repudiate any claim without the consent of your broker/insurer.
  • Forward all relevant documentary evidence in respect of the loss.
  • Forward all claims, writs of summons or letters from third parties to your broker/insurer through insureghana.com.

1. If your vehicle was driven without your consent, order or permission.
2. When an unlicensed driver was driving
3. When the claim is statute barred i.e claims not submitted within the three (3) or six (6) years period.
4. Where there was a change of ownership on the vehicle without reference to us.
5. Using the vehicle whilst the driver was drunk.
6. Using the vehicle for unauthorized purposes.
A. Own damage
  • Report the loss to the insurer and fill the accident report form.
  • Attach a copy of the driver’s license.
  • Furnish the insurer with an estimate of the cost of repairs from either the insurer’s recommended garage or a repairer of your choice.
  • Provide pictures of the damaged vehicle, clearly showing the registration number of the accident vehicle.
  • Allow damaged vehicle to be inspected by the insurer’s surveyor before the commencement of repairs.
  • Police report would be required, depending on the circumstances leading to the loss.

B. Property damage claim
  • Letter of claim
  • Police Report
  • Furnish the insurer with an estimate of the cost of repairs from either the insurer’s recommended garage or a repairer of your choice.
  • Provide pictures of the damaged vehicle.
  • Provide driving license of the insured’s driver.
C. Injury cases·
  • Letter of claim
  • Police Report
  • Medical report
  • Original receipts of Medical Bill incurred (To justify the cost being claimed for)
  • Sworn Affidavit.
Two (2) passport-size pictures of the injured victim endorsed by the doctor who treated the victim.D. Deceased (death) cases
  • Letter of claim
  • Police Report
  • Death Certificate/Burial permit/Post-mortem report
  • Letters of Administration
  • Personal Particulars of the deceased
  • Sworn Affidavit
  • Endorsed passport size pictures of Administrators (two each).
In all cases, a discharge form which states the agreed quantum (amount) will be issued by the insurance company to the insured or claimant for execution and forwarded back to enable us process the cheque.

Under all insurance contracts, damages or losses incurred must be reported to the insurance company for the purpose of making a claim. In most cases a report must also be made to the police. Under a motor insurance for example, you must report any accident to the police as soon as it occurs to enable you to begin the processes for making insurance claims.Failure to report an accident can subject you to personal liability if the persons involved later find themselves to be injured and your insurance company denies the claims due to your failure to report the accident promptly.
This is what you are paid in the case of an accident or loss for which you have insured. Once you have entered into an insurance contract and paid your premium, you are entitled to compensation from the insurance company for any damage or loss suffered. The extent of compensation depends on the type of insurance.

By Admin at February 16, 2021

NIC develops Compulsory Commercial Fire Insurance policy

Read More

By Admin at February 15, 2021

Mobile phones insurance – fast growing?

Read More

By Admin at January 20, 2021

WAPIC Insurance: Change Of Company Name

Read More

By Admin at March 3, 2020

Industry-first deal between Hollard and Melcom to provide insurance for shoppers

Read More

By Admin at January 29, 2020

Westom Insurance Brokers, Your Trusted Partner in INsurance

Read More

By Admin at January 21, 2020

The National Insurance Commission Fades Out Manual Motor Stickers

Read More