Botswana: Insurance companies to stop insuring imports?

botswana_used_carsOwners of second hand vehicles from Asia and other imported models, especially from China may find themselves in the lurch because some insurance companies appear reluctant to provide them with motor cover.

It is understood that major players in the insurance industry will soon meet to decide on the fate of the imports and some models from China such as GoNow, citing shortage of spare parts as a major concern.

While a number of insurance companies have confirmed that they have stopped insuring the GoNow range, some owners of other Chinese models such as CAM (Rhino) have told Mmegi about concerns for the future of their vehicles. A source from one of the major insurance companies, who spoke on condition of anonymity said that it is true they are no longer covering the GoNow range.

“We have the option to accept or decline risk anyhow and we are not under any obligation to explain,” he said.The source added that his company received an ‘SOS’ from South Africa that some of the dealers of the range had folded up and there is a risk of scarcity of parts. He said that although it is likely that spare parts for the range are currently available in stock, his company fears that in future, they might be hard to find and this would greatly compromise their relationship with clients.

Another high-ranking official of a major insurance company in Botswana refused to make an official comment about the status quo.”We are yet to make a decision about the issue as the insurance industry. You have to wait until we have reached a consensus about it and then we will make our decision public,” she said. However, the managing director of Supa Cars (GoNow dealers), Cassim Kowa, rubbished the claims that insurance companies do not provide cover for their vehicles because of shortage of spare parts.

“There are spare parts even in our storerooms here and we are still getting them from China. How can banks give loans to people to buy our vehicles if they cannot be insured? We have even sold some of our products to government,” he said. He added that GoNow bosses from China have new plans for the range. Kowa dismissed fears that his company might fold.

Likewise, the principal dealer of CAM, Zain Bhamjee of BB Motors, was adamant that his range is not under any risk of not being insured by local insurance companies. “You can talk to any insurance company and they will tell you that they cover all CAM vehicles. As far as spares are concerned, CAM South Africa has stockpiled millions of them,” Bhamjee told Mmegi.

Previously, some owners of imported second-hand vehicles struggled to secure cover but things changed when insurance companies realised that there were missing lucrative business as many Batswana were buying the vehicles. New cars from Asia never had any challenges with insurance until recently.

Mmegi Online

Post published in: Economy

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