Amend Insurance Act to capture vehicle towing — George Addae
An insurance consultant, Mr George Addae, has welcomed suggestions that insurance companies should be responsible for towing defective vehicles on the roads, but said its implementation required the amendment of the insurance law to raise funds to finance the cost of towing vehicles.
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He said the amendment should establish a vehicle towing fund, spelling out the modalities for its management and the premium adjustments to go with it.
Mr Addae, also explained that the traditional insurance premium would not suffice for footing the cost of towing levies as its collection was not binding on insurance companies.
“If we want to use insurance there is a way we can go about it, but not with the traditional insurance covers,” he told the GRAPHIC BUSINESS in an interview.
Towing services fund
To buttress his point, Mr Addae explained that compulsory insurance of commercial buildings under construction and upon completion, had been captured in the Insurance Act, 2006 (Act 724) for the purpose of raising funds for the establishment of the fire service maintenance fund.
He added that just as the fire maintenance fund had been created under sections 185 -191 of the Act and had been serving its purpose without generating any issues, the same could be done with respect to the creation of a towing services fund.
“Currently, the Insurance Act, 2006 is being reviewed and this is the right time to include a provision for towing levies into the Act if we want to really use insurance to curb the situation.” He said.
Why insurance companies can’t handle towing
Mr Addae explained that currently the motor insurance policy did not directly cover the towing of every vehicle and explained that insurance companies would only admit cost of towing vehicles that has been disabled, following an accident that results in a loss admissible under the insurance cover.
Current limitations
Mr Addae said that currently, only comprehensively insured vehicles were eligible for towing when they break down accidentally. All other covers are therefore excluded from any form of towage claims except by special arrangement of the insurer.
“Part D of the comprehensive motor insurance policy which talks about towing and storage, states that, in the event of an accident the company will pay for the reasonable cost of protection and removal of vehicle to the nearest repairer or place of safety approved by the company, provided the cost does not exceed 20 per cent of the agreed bill,” he indicated.
Alternative
The astute insurer said an alternative was for the Minister of Finance to issue a Legislative Instrument (LI) to create the levy and cause the National Insurance Commission to issue the directives and introduce the amount that must be specifically charged for vehicle towing.
Tracking broken down vehicles
According to him, the only way vehicles that broke down on streets could be detected easily and towed was for the towing company to create awareness and to put up contact signages along the road side.
He said that the companies could also put people on guard at vantage points, especially on busy roads and accident prone areas, where they could be reachable if the need arose.
In addition, he said, the system should not over rely on technology, as they came with system failures and challenges that could impede the quick access to towing services.
