Over 70% of Uganda's Vehicles Drive Without Insurance Amid Low Compliance

Uganda faces a major insurance crisis, with over 70% of its more than two million vehicles uninsured. Recent 2025 data reveals only 577,000 insured vehicles, equating to about 29% compliance and roughly 1.4 million vehicles lacking mandatory coverage.

Motorcycles highlight the issue sharply. Estimates put nearly two million boda bodas nationwide, yet only 88,000 are insured—a mere 4% rate. Coverage has dropped 24% from 115,000 in 2023 to 88,000 in 2025, including a 14% decline last year. Commercial vehicles fare similarly, with just 135,000 active policies.

A shift to digital motor third-party insurance aimed to boost uptake through mobile money payments and instant digital stickers. However, challenges like network issues, low awareness, poor enforcement, and traffic officers’ unfamiliarity with verification have hindered progress.

Fraud worsens the problem, as many vehicles sport fake stickers, potentially understating true uninsured numbers, according to the Insurance Regulatory Authority (IRA). Despite this, the system generated over Shs20 billion in taxes in 2025, or about Shs1.7 billion monthly.

Industry experts criticize the outdated 1989 law, which limits compensation to Shs1 million per victim—insufficient for today’s medical costs. Uganda Insurers Association CEO Jonan Kisakye notes this disconnect erodes perceived value. Reforms propose raising limits, adjusting premiums, and including exempt government vehicles.

The sector targets doubling insured vehicles to one million, though that would still leave nearly half uninsured. Meant to protect accident victims, third-party insurance falls short for most Ugandans without better compliance.

Source: Daily Monitor (Uganda)