Uganda's Digital Motor Insurance: Promising Shift Amid Rollout Challenges and Low Compliance

Uganda has introduced digital motor third-party (MTP) insurance to replace paper stickers, enabling instant purchases via mobile money or online platforms and real-time verification by police. This shift promises greater transparency and efficiency for motorists.

However, implementation issues persist. Motorists report fuel station agents inflating sticker prices and refusing self-service prints, while network problems and untrained traffic officers leave drivers vulnerable. In rural areas, validation delays compound frustrations, and many remain unaware of the system or renewal rules.

Compliance remains alarmingly low. The 2025 insurance report shows just 577,000 of over two million vehicles insured, including only 88,000 motorcycles despite an estimated two million boda bodas nationwide—a 14% drop from 2024. Commercial vehicles fare similarly poorly at 135,000 policies.

Industry leaders highlight the stakes. Uganda Insurers Association CEO Jonan Kisakye notes MTP generated Shs20 billion in government revenue last year through stamp duty and VAT, yet low uptake signals non-compliance risks. Insurance Regulatory Authority’s Sande Protazio points to fake stickers from unofficial sources and enforcement gaps, with 70% of vehicles uninsured.

Reforms are underway to address outdated 1989 laws capping compensation at Shs1 million, inadequate for current costs. Proposals include raising liability limits, insuring government fleets, and actuarial studies for fair premiums. Enhanced voluntary covers now offer higher protection for added fees.

The sector aims to double insured vehicles to one million, leveraging digital tools, awareness campaigns, and stricter fines (Shs100,000–200,000). MTP protects third parties like pedestrians and passengers, not vehicle owners or property.

This article is based on reporting from the Daily Monitor.