State Vehicles May Not Be Insured

Several billions of cedis required to insure thousands of state vehicles may force government to change its plans. A top official has hinted that government will no longer insure all vehicles but a selected few. Already, a roll-out policy initiated by insurance companies trying to attract state bodies for the package is falling apart.

A couple of months ago, the Finance Minister, Yaw Osafo Maafo announced that government needed $80 million to insure its vehicles. However, the Minister indicated that efforts to embark on the exercise require significant funding, which the budget cannot meet.

According to officials from the Finance Ministry, government will require an extra 2% of the total revenue to insure all state vehicles thus pushing the budget deficit upwards. “This is what we are trying to prevent”, remarked one official indicating that while the idea is right, implementation may have to wait.

While it is mandatory for all individuals and corporate owned vehicles to be registered under the country’s Insurance Laws, government has stayed rebuffed and clear of this policy.

Currently, only state affiliated corporate bodies insure their vehicles, but the trend is expected to change when government reviews its stand and submit itself to the scheme.

The move will be a boost to the insurance industry as it is expected to fetch as much as 20% increase in volume of business. In the face of budgetary constraints, government has opted to insure only its vehicles, which are needed for extensive official travel outside Accra, on the basis that these vehicles have relatively a high likelihood of being involved in accidents.