Are You Paying Too Much for Car Insurance?

EDITOR'S NOTE: This article is produced in partnership with AiCare, which powers TIA Switch. For more on Money254’s editorial policy, read here.  

Car owners in Kenya can now experience usage-based insurance that allows people who drive less to pay lower insurance premiums. 

One of the products available in the Kenyan market is TIA Switch, which uses telematics technology to offer custom insurance coverage for drivers who drive their cars for less than 10,000 kilometres per year. 

For years, it did not matter whether you drove your car once a week or you were always on the road - your insurance premiums in those two scenarios would be relatively the same regardless of usage. 

As a car owner driving say 8,000 kilometres annually, you pay the same insurance premiums as someone who clocks 30,000 kilometres every year if your vehicle type, value and perceived personal risk level are near-similar. 

But this is slowly changing, in Kenya and globally, as the insurance industry embraces innovation and technology to give consumers more choice. 

In this article, we explore the latest entrant in the Kenyan insurance company that is offering this innovative service - TIA Switch - to help you decide, especially if you drive less than 10,000 kilometres a year, whether this is the right insurance type for you. 

Who Qualifies 

The basic eligibility requirements include:

• You own a car that is used for not more than 10,000 kilometres per year. This translates to about 830 kilometres per month, about 208 kilometres per week, and 27 kilometres per day on average. . 
• Your car is not used as a PSV in any way. 
• You live in Nairobi and its environs

Some of the people who may fall into this category include: 

1. You own more than one car 
2. You live close to your workplace and have little need to drive outside of the work commute
3. You mostly work from home and rarely need to drive 
4. You own a car but have a company car for most of your travel needs
5. You are retired and mostly use your car on weekends
6. You have a change of circumstances requiring you to sparingly use your car - e.g when you are on maternity leave, you are frequently traveling abroad, etc.

TIA Switch is Not an Option for You If: 

1. You use your car as a Public Service Vehicle (PSV)
2. You are outside Nairobi and its environs
3. You drive on a daily basis and commute for more than 25 kilometres per day

How TIA Switch Usage-Based Insurance Works

TIA Switch is an insurance product underwritten by Takaful Insurance of Africa and powered by AiCare. It is regulated by the Insurance Regulatory Authority (IRA). It uses telematics technology to offer discounted premiums for Kenyans driving less than 10,000 kilometres in a year and those who are intent on maintaining safe driving.

The company’s pricing model seeks to give a discount to drivers whose cars are exposed to less risk on account of little use and careful driving. This information is confirmed through a telematics box that is installed after a customer purchases the TIA switch insurance cover.

The telematics box is installed after the purchase of an insurance cover and remains there for the life of the policy. You do not need to have it re-installed in subsequent renewal of the policy. 

The telematics box keeps track of the kilometres travelled, although it does not keep a record of places visited, as the company tells Money254.co.ke. 

It uses telematics technology to share feedback with drivers on their driving skills and areas where they can improve, with regard to safe driving skills. The feedback is shared through a mobile app that you can install on your phone after having the telematics box installed. 

The box may also be used to send out an alarm in instances where you are in danger, such as when your car is involved in a serious or fatal accident, or when you are reported to be in grave danger. 

The whole process is also fully online, from registration to the claims process, which eliminates the hassle of having to fill in tedious paperwork when you need to make a claim. 

Why TIA Switch Stands Out 

Cost of Premiums

In the past, if you were driving a 2009 Toyota Harrier with a valuation of Ksh1 million, and driving it for 50 kilometres a week - you would pay the same premiums as someone who has the same car model, valued at Ksh1 million, but driving it for 500 kilometres a week. 

TIA Switch has a business model where the cost of insurance is not generalised. Through the use of telematics technology, TIA Switch works on a pricing model where those who drive on the road less, also pay less. 

TIA Switch informs Money254.co.ke that their premiums are up to 20% cheaper than the traditional insurance. 

For example, if you are paying Ksh84,000 in premiums for a car that drives less than 10,000 kilometres every year, then you are paying Ksh72,000 more than you would be paying through TIA Switch’s cost-saving pricing model. 

In addition, TIA Switch comes with an inbuilt Insurance Premiums Financing (IPF) feature.

Free Excess Protector

Usually, when you make an insurance claim, you might have to pay a certain amount of money from your own pocket before the insurance provider steps in. This amount is called the "excess." 

However, with an "excess protector," you don't have to worry about paying any money from your own pocket. Typically, this is an add-on cover that you need to pay for in addition to your regular insurance cover if you want to opt in and enjoy this convenience in the event you were to make a claim. 

With a TIA Switch insurance cover, you do not need to pay extra to obtain an “excess protector’ since this comes bundled with the discounted cover.

So, with TIA Switch, you not only get a discounted insurance cover if you drive less than 10,000 kilometres annually, but you also do not need to pay for the excess protector. 

Fully Online, from Application to Claims

More people are embracing products that save them from tedious paperwork. A paperless engagement is oftentimes more time-efficient and less mentally taxing

The TIA Switch cover is fully digital, which makes it easier to apply, make a payment, and make your claims when needed.

Helpful Feedback on Safe Driving Tips 

The telematics box that comes with the TIA Switch insurance cover is able to monitor your driving skills and make recommendations through the mobile app. 

Whether a new or an experienced driver, road safety is increasingly a life-saving reality for drivers. The feedback provided, therefore, can offer actionable insights to help you become a safer driver. 

Some of the driving mistakes that affect the security of your car can also result in higher fuel consumption meaning insights from the telematics box can potentially help you reduce your fuel bill. 

Other benefits

The TIA Switch cover comes with other benefits including:

• A windscreen cover (dashboard cover) - protects your windscreen and dashboard from the negative effects of extreme weather 
• Courtesy cab - a free taxi provided by the insurance provider to help you get around in the event your car is in an accident and needs to be taken off the road while the repairs are done. 

How to Apply for TIA Switch Insurance 

Step 1: Fill in basic details about your vehicle and mileage information to check if you qualify

Step 2: Get an online quote with the discounted rate and pay with card or M-Pesa

Step 3: TIA Switch sends a technician to your location in under 45 minutes to do the installation and valuation. (This could be done in your home, office, or on the go in Nairobi. If we can’t come to you, we will send you to the nearest installation and valuation center.)

Step 4: You are all set! You get a digital certificate in your email, print and display your new sticker.

Step 5: Download the mobile app. Monitor kilometers, and get safe driving tips. 

Would you consider the TIA Switch insurance cover? You can start your application here: