This is regulated in accordance with the Road Traffic Act of Malawi, which makes it compulsory for all users of motor vehicles to have minimum cover to indemnify them, at least, whenever they cause damage to property belonging to third parties, or bodily injury to third parties, arising out of the use of the said vehicles on the road.
Broad categories are Private Motor, Commercial Vehicles, Motorcycles, Motor Traders Internal Risks, Motor Traders External Risks, Commercial Vehicles Special Types, and Motor Contingent Liability.
Commonly sought for motor covers are Private Motor, Commercial Vehicles (carriage of own goods, hire & reward, and buses) and Motorcycles.
There are four levels of cover:-
- Road Traffic Act covering has restrictive third party limits of liability
- Third Party only:- same cover as in RTA but with far much increased third party limits of liability. Moreover, insureds have choice to ask for even higher limits of liability, whereas in RTA cover insured are not allowed to ask for higher limits of liability.
- Third Party, Fire, and Theft cover:- in addition to third party only, cover includes loss of or damage to the vehicle due to fire and theft or attempted theft. The term “fire” here includes self- ignition, lightning and explosion
- Comprehensive:- this is all risks of loss or damage to the vehicle, subject to exclusions.