Uganda Act or statute

Parliament of Uganda

Motor Vehicle Insurance (Third Party Risks) Act

Jurisdiction: Uganda
Structure: 20 provisions
Citation: Chapter 214
Dates: Undated source snapshot

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Dates: Undated source snapshot

Source attribution: Source: Uganda Legal Information Institute

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Purpose and legislative effect

“This section provides definitions of terms used in the Act, including board, certificate of insurance, commissioner, council, driver, insurance company, insurer, insured, Minister, owner, third party, and vehicle.”

This section provides definitions of terms used in the Act, including board, certificate of insurance, commissioner, council, driver, insurance company, insurer, insured, Minister, owner, third party, and vehicle. A person against whom a claim is made must, when asked by or for the claimant, say whether they were (or would have been) insured for that liability and provide the policy particulars; failing to comply or making false statements without reasonable excuse is an offence punishable by a fine up to one hundred thousand shillings. Owners must not use a vehicle for a purpose other than the one insured unless the full premium for that other purpose is paid; insurers may set different premiums for different uses (subject to the commissioner and the Act) and may recover from the owner the difference plus an extra full premium when a vehicle is used in contravention. An insurer party to a policy may settle claims or conduct proceedings on behalf of an insured; if the insurer conducts proceedings it must indemnify the insured for related costs; the insured must sign warrants and authorities the insurer requires. If rights against an insurer are transferred, the insurer is liable to the third party as if to the insured.

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Interpretation - Interpretation

Section 1

Compulsory insurance of vehicles - Passengers for hire not to contract themselves out of benefits

In claims against an insured or insurer for death or injury to a passenger for hire, a contract term excluding or limiting the insured's liability is not a valid defence.

Section 14

Compulsory insurance of vehicles - Avoidance of restrictions on scope of policy

Policy terms that restrict who or what is insured for the liabilities required under section 3(b) are ineffective; the insurer may recover from the insured any sum paid under this section.

Section 6

Miscellaneous - Production of evidence of policy on licensing and transfer of vehicle

Applicants for a licence, licence renewal, or registration after transfer must produce evidence of an insurance policy complying with the Act or that the vehicle falls under section 2(2); licensing officers must not issue licences or re…

Section 37

Miscellaneous - Suspension of Part III

Sections 15 to 36 of Part III, and the definitions of "board" and "council" as they apply to those sections, are suspended.

Section 42

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Showing 20 of 20 provisions

Provision 12Offence 6Interpretation 2

Part I

Interpretation

§ 1Interpretation - InterpretationInterpretation

Section Interpretation Section In this Act, unless the context otherwise requires— (a) " board " means the board of the Nominal Defendant Council established under section 19 ; (b) " certificate of insurance " means a certificate of insurance issued under section 7 ; (c) " commissioner " means the commissioner for insurance appointed under the Insurance Act; (d) " council " means the Nominal Defendant Council established under section 15 ; (e) " driver " means any person who drives a vehicle on a road or who is in actual physical control of the vehicle ; (f) " insurance company " means an insurer within the meaning of section 4 of the Insurance Act; (g) " insurer " means an insurance company which issues a policy of insurance required under section 2 ; (h) " insured " means a person or persons or classes of persons covered by a policy of insurance taken out under section 2 ; (i) " Minister " means the Minister responsible for finance; (j) " owner " has the same meaning as in the Traffic and Road Safety Act; (k) " third party " means a person or persons or classes of persons not privy to the policy of insurance taken out under section 2 ; (l) " vehicle " means all types of motor vehicles defined under and for the purposes of the Traffic and Road Safety Act, and includes trailer and engineering plant as defined in that Act but does not include any of the following— (i) a vehicle propelled by mechanical power and specially designed and constructed (and not merely adapted) for the use of persons suffering from some physical defect or disability and used solely by those persons; (ii) a bicycle or tricycle fitted with an auxiliary internal combustion engine having a maximum cylinder capacity of thirty-five cubic centimetres; (iii) such other vehicles as may from time to time, by regulations made under the Traffic and Road Safety Act, be declared not to be motor vehicles for the purposes of that Act.

Section 1

Part II

Compulsory insurance of vehicles

§ 10Compulsory insurance of vehicles - Duty of owner, etc. to give information as to insuranceOffence

A person against whom a claim is made must, when asked by or for the claimant, say whether they were (or would have been) insured for that liability and provide the policy particulars; failing to comply or making false statements without reasonable excuse is an offence punishable by a fine up to one hundred thousand shillings.

Section Duty of owner, etc. to give information as to insurance Section Any person against whom a claim is made in respect of any liability as is required under section 3 (b) to be covered by a policy of insurance shall, on demand by or on behalf of the person making the claim, state whether or not he or she was insured in respect of that liability under any policy having effect for the purposes of this Act or would have been so insured if the insurer had not avoided or cancelled the policy, and, if he or she was or would have been so insured, give such particulars with respect to that policy as were specified in the certificate of insurance issued in respect of that policy under section 7 . Any person who, without reasonable excuse, fails to comply with this section, or wilfully makes any false statements in reply to any such demand as aforesaid, commits an offence and is liable on conviction to a fine not exceeding one hundred thousand shillings.

Section 10

§ 11Compulsory insurance of vehicles - Provisions applicable where a premium less than the proper premium is paidProvision

Owners must not use a vehicle for a purpose other than the one insured unless the full premium for that other purpose is paid; insurers may set different premiums for different uses (subject to the commissioner and the Act) and may recover from the owner the difference plus an extra full premium when a vehicle is used in contravention.

Section Provisions applicable where a premium less than the proper premium is paid Section Subject to the powers of the commissioner under the Insurance Act, but subject to this Act, an insurer may fix different rates of insurance premium in respect of different purposes for which a vehicle may be used. Where the premium has been so fixed in respect of a vehicle , the owner of the vehicle shall not use it or permit it to be used for a purpose other than that for which the rate of insurance premium has been fixed, unless the full amount of the insurance premium payable in respect of that other purpose has been paid, but failure by an owner to comply with the requirements of this subsection shall not affect the rights of a third party under this Act. Where an owner of a vehicle uses or permits such a vehicle to be used in contravention of this section, the insurer shall be entitled to recover from him or her as a debt the difference between the premium paid and the premium properly payable plus an amount equal to one full premium properly payable.

Section 11

§ 12Compulsory insurance of vehicles - Insurer may settle claimProvision

An insurer party to a policy may settle claims or conduct proceedings on behalf of an insured; if the insurer conducts proceedings it must indemnify the insured for related costs; the insured must sign warrants and authorities the insurer requires.

Section Insurer may settle claim Section An insurer that is a party to a policy under this Act may at any stage undertake on behalf of the insured or any other person that the insurer is liable to indemnify under the policy— the settlement of any claim against the insured or other person; and any proceedings or enforcement of any claim or the settlement of any issue arising from a claim. Where the insurer undertakes the conduct or defence of any proceedings under subsection (1), it shall indemnify the insured or other person against all costs and expenses of and incidental to those proceedings. The insured or other person shall sign all such warrants and authorities as the insurer may require for the purpose of enabling the insurer to have the conduct or defence of any such proceedings.

Section 12

§ 13Compulsory insurance of vehicles - Rights of third parties against insurer on bankruptcy, etc. of insuredProvision

If rights against an insurer are transferred, the insurer is liable to the third party as if to the insured.

Section Rights of third parties against insurer on bankruptcy, etc. of insured Section Where under any policy of insurance a person is insured against liabilities to third parties which he or she may incur, then— Upon a transfer of the rights against the insurer under subsection (1) or (2), the insurer shall be under the same liability to the third party as he or she would have been to the insured , but— in the event of the insured becoming bankrupt or making a composition or arrangement with his or her creditors; or in the case of the insured being a company, in the event of a winding up order being made, or a resolution for a voluntary winding up being passed with respect to the company, or of a receiver or manager of the company’s business or undertaking being duly appointed or of possession being taken, by or on behalf of the holders of any debentures secured by a floating charge, or any property comprised in or subject to the charge, Where an order is made under section 118 of the Bankruptcy Act for the administration of the estate of a deceased debtor according to the law of bankruptcy, then, if any debt provable in bankruptcy is owing by the deceased in respect of a liability against which he or she was insured under a policy of insurance as being a liability to a third party , the deceased debtor’s rights against the insurer under the policy in respect of that liability shall, notwithstanding anything in that Act, be transferred to and vest in the person to whom the debt is owing. Where there is provision in any policy of insurance made in respect of any liability of the insured to third parties purporting, whether directly or indirectly, to avoid the policy or to alter the rights of the parties thereunder upon the happening to the insured of any of the events specified in subsection (1)(a) or (b), or upon the making of an order under section 118 of the Bankruptcy Act in respect of his or her estate, the policy shall insofar as that provision is concerned be of no effect. if the liability of the insurer to the insured exceeds the liability of the insured to the third party , nothing in this section shall affect the rights of the insured to claim against the insurer in respect of the excess; and if the liability of the insurer to the insured is less than the liability of the insured to the third party , nothing in this section shall affect the rights of the third party against the insured in respect of the balance. For the purposes of this section, "liabilities to third parties", in relation to a person insured under any policy of insurance, shall not include any liability of that person in the capacity of insurer under some other contract of insurance. This section shall not apply where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company.

Section 13

§ 14Compulsory insurance of vehicles - Passengers for hire not to contract themselves out of benefitsProvision

In claims against an insured or insurer for death or injury to a passenger for hire, a contract term excluding or limiting the insured's liability is not a valid defence.

Section Passengers for hire not to contract themselves out of benefits Section In any proceedings or any claim against an insured or an insurer under this Act in respect of an accident causing death of or bodily injury to any person being at the time of the accident a passenger for hire in the vehicle , it shall not be a defence that the contract of carriage had excluded or modified the liability of the insured or of any other person from paying or to pay damages in respect of accidents due to the negligence or wilful default of the insured .

Section 14

§ 2Compulsory insurance of vehicles - Vehicles to be insured against third party risksOffence

It is unlawful for any person to use a vehicle on a road unless there is a third‑party insurance policy in force; vehicles owned by the Government of Uganda are exempt.

Section Vehicles to be insured against third party risks Section It shall not be lawful for any person to use, or to cause or to permit any other person to use, a vehicle on a road unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance in respect of third party risks that complies with the requirements of this Act. Subsection (1) shall not apply to a vehicle owned by the Government of Uganda. Any person who contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding one hundred thousand shillings or to a term of imprisonment not exceeding two years or to both such fine and imprisonment. A person convicted under subsection (3) shall, unless the court for special reasons thinks fit to order otherwise, and without prejudice to the power of the court to order a longer period of disqualification, be disqualified from holding or obtaining a driving permit for twelve months from the date of conviction, in addition to the penalties that may be imposed under subsection (3).

Section 2

§ 3Compulsory insurance of vehicles - Scope of policy of insuranceProvision

The policy of insurance must be issued by a licensed insurer and must insure persons for liability for death or bodily injury caused by use of a vehicle on the road, except it need not cover such liability arising out of employment.

Section Scope of policy of insurance Section In order to comply with the requirements of section 2 , the policy of insurance must be a policy which— is issued by an insurer holding a licence issued by the commissioner under the Insurance Act; and insures such a person or persons or classes of persons as may be specified in the policy in respect of liability which may be incurred by him or her or them in respect of death of or bodily injury to another person caused by or arising out of the use of a vehicle on the road; except that a policy in terms of this section shall not be required to cover liability in respect of the death of or bodily injury to a person arising out of and in the course of employment of the person, by a person insured under the policy.

Section 3

§ 4Compulsory insurance of vehicles - Penalty for false statements and wilful avoidance of policyOffence

Anyone who makes a false statement to obtain a motor insurance policy required under section 2, or wilfully acts to disentitle themselves to a claim, commits an offence and on conviction may be fined up to one hundred thousand shillings, imprisoned for up to two years, or both.

Section Penalty for false statements and wilful avoidance of policy Section Any person who, for the purposes of obtaining a policy of insurance as required under section 2 , makes any false statement in consequence of which the policy is liable to be avoided, or wilfully does any act which disentitles him or her to claim under the policy, commits an offence and is liable on conviction to a fine not exceeding one hundred thousand shillings or to a term of imprisonment not exceeding two years or to both such fine and imprisonment.

Section 4

§ 5Compulsory insurance of vehicles - Certain conditions in policy to be of no effectProvision

Conditions in an insurance policy that extinguish or negate the insurer's liability for liabilities required by section 3(b) to be covered are ineffective.

Section Certain conditions in policy to be of no effect Section Any condition in a policy of insurance providing that no liability shall arise under the policy, or that any liability so arising shall cease in the event of some specified thing being done or being omitted to be done after the happening of the event giving rise to a claim under the policy, shall, as respects such liabilities as are required under section 3 (b) to be covered by a policy, be of no effect. Nothing in subsection (1) shall be taken to render void any provisions in a policy requiring the person insured to repay to the insurer any sums which the insurer may have become liable to pay under the policy and which have been applied to the satisfaction of the claims of third parties.

Section 5

§ 6Compulsory insurance of vehicles - Avoidance of restrictions on scope of policyProvision

Policy terms that restrict who or what is insured for the liabilities required under section 3(b) are ineffective; the insurer may recover from the insured any sum paid under this section.

Section Avoidance of restrictions on scope of policy Section Where a certificate of insurance has been issued under section 7 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured by reference to any of the following matters— the age, physical or mental conditions of persons driving the vehicle ; the condition of the vehicle ; the number of persons that the vehicle carries; the weight or physical characteristics of the goods that the vehicle carries; the times at which or the areas within which the vehicle is used; the horsepower or value of the vehicle ; the carrying on the vehicle of any particular apparatus; or the carrying on the vehicle of any particular means of identification, shall, as respects the liabilities required to be covered by a policy under of section 3 (b), be of no effect. The insurer may recover from the insured any sum paid in or towards the discharge of liability incurred by virtue only of this section.

Section 6

§ 7Compulsory insurance of vehicles - Certificate of insuranceProvision

The insurer must issue a certificate of insurance to the person who effects the policy at the same time as the cover note.

Section Certificate of insurance Section A certificate of insurance shall be issued by the insurer to the person by whom a policy of insurance is effected at the same time as the cover note is issued. The certificate shall be in a prescribed form and shall contain such particulars of any conditions subject to which the policy is issued and of any matters as may be prescribed, and different forms and different particulars may be prescribed in relation to different cases or circumstances.

Section 7

§ 8Compulsory insurance of vehicles - Display of certificate of insuranceOffence

If a police officer requires it, a person using a vehicle in breach of subsection (1) must produce the certificate of insurance or other evidence within seven days of the request.

Section Display of certificate of insurance Section No vehicle in respect of which a policy of insurance is required under this Act shall be used on a road unless a legible certificate of insurance is displayed on the vehicle in a conspicuous manner. Any person who, using a vehicle on a road in contravention of subsection (1), is required by a police officer to produce his or her certificate of insurance for the purposes of determining whether the vehicle was or was not being driven in contravention of section 2 shall, within seven days from the date of the request, produce to the police officer or the nearest police station the certificate or such other evidence as may show that there is a policy of insurance in force. A person who contravenes subsection (1) or (2) commits an offence.

Section 8

§ 9Compulsory insurance of vehicles - Owner to give notice of accident to insurerProvision

The owner must promptly give the insurer written notice of an accident causing death or bodily injury, provide particulars and other information or steps as the insurer may reasonably require, notify the insurer of claims or actions, and if the owner fails to comply the insurer may recover as a debt amounts (as the court thinks fit) not exceeding costs incurred.

Section Owner to give notice of accident to insurer Section In the event of an accident affecting a vehicle , and resulting in the death of or bodily injury to any person, the owner shall forthwith after the accident, or if the owner was not in charge of the vehicle at the time of the accident forthwith after he or she first becomes aware of the accident, give notice in writing to the insurer of the fact of the accident, with particulars as to the date, nature and circumstances of the accident, and thereafter give all such other information and take all such steps as the insurer may reasonably require in relation to the accident, whether or not any claims have actually been made against the owner on account of the accident. Notice in writing of every claim made or action brought against the owner , or to the knowledge of the owner made or brought against any other person, on account of an accident as aforesaid shall forthwith thereafter be given by the owner to the insurer ; and thereafter the owner shall give such other particulars as the insurer may require. If the owner fails to give any notice or otherwise fails to comply with any requirement of this section in respect of any matter, the insurer shall be entitled to recover from him or her as a debt such amount as the court, having regard to all the circumstances of the case, thinks fit, not exceeding an amount equal to the total amount, including costs, incurred by the insurer as a result of such failure or noncompliance.

Section 9

Part IV

Miscellaneous

§ 37Miscellaneous - Production of evidence of policy on licensing and transfer of vehicleOffence

Section Production of evidence of policy on licensing and transfer of vehicle Section A person who in respect of a vehicle applies under the Traffic and Road Safety Act for— a licence or renewal of a licence; or registration of a new owner consequent upon a transfer of ownership, shall produce to the licensing officer evidence to show that either— there is in force in relation to the use of the vehicle a policy of insurance in compliance with this Act; or the vehicle is a vehicle to which section 2 (2) applies. Any licensing officer who in respect of a vehicle issues a new licence or registers change of ownership without such evidence being produced to him or her commits an offence. Any person who produces false evidence for purposes of obtaining a licence or procuring registration of change of ownership commits an offence.

Section 37

§ 38Miscellaneous - Insurance companies to underwrite third party insuranceProvision

Licensed insurance companies must underwrite third-party risks; the commissioner may refuse to issue or renew a licence under section 76 if not satisfied the company underwrites a reasonable amount of such business.

Section Insurance companies to underwrite third party insurance Section Every insurance company issued with a licence under the Insurance Act shall be required to carry on the business of underwriting third party risks; and where the commissioner is not satisfied that an insurance company is carrying on a reasonable amount of such business, he or she may refuse to issue or to renew a licence to that insurance company under section 76 of that Act.

Section 38

§ 39Miscellaneous - Third party to sue the insured, etc. and not the insurerProvision

A third party must sue the owner, driver or council (as appropriate) rather than the insurer for third-party claims arising from accidents causing property damage, death, or bodily injury.

Section Third party to sue the insured, etc. and not the insurer Section In all third party claims in respect of damages to property of, the death of or bodily injury, to any person, arising from any accident, the third party shall proceed against the owner , or the driver or the council , as the case may be, and not the insurer .

Section 39

§ 40Miscellaneous - General penaltyOffence

Any person who commits an offence under this Act or its regulations, for which no other penalty is provided, is liable on conviction to a fine not exceeding fifty thousand shillings, or to imprisonment for a term not exceeding twelve months, or to both.

Section General penalty Section Any person who commits an offence under this Act or any regulations made under this Act, for which no other penalty is specifically provided, is liable on conviction to a fine not exceeding fifty thousand shillings or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.

Section 40

§ 41Miscellaneous - RegulationsProvision

The Minister may make regulations by statutory instrument, after consulting the Uganda Insurance Association and taking into account the economy's performance; these regulations may include prescribing premium rates and minimum insured amounts under this Act.

Section Regulations Section Without prejudice to the general effect of subsection (1), the Minister may, after consultation with the Uganda Insurance Association and after taking into account the performance of the economy of Uganda, by regulations made under that subsection— The Minister may, by statutory instrument, make regulations, prescribing anything required by this Act to be prescribed and generally for better carrying out the provisions of this Act. prescribe rates of premium to be paid under an insurance policy under this Act; and prescribe the minimum amount to be insured in respect of liability under an insurance policy under this Act.

Section 41

§ 42Miscellaneous - Suspension of Part IIIInterpretation

Sections 15 to 36 of Part III, and the definitions of "board" and "council" as they apply to those sections, are suspended.

Section Suspension of Part III Section Sections 15 to 36 are suspended and, accordingly, the definitions of "board" and "council" and any other provisions of the Act applicable to the suspended provisions are to the extent of that application also suspended.

Section 42

Legislative relationships

2 referenced instruments

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Bankruptcy Act
Section 13

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1 instrument

Insurance Act
Section 1

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