Insurance firms sued for 'exposing Kenyans to ruin'
National
By
Nancy Gitonga
| Dec 11, 2025
A Nairobi motorist has filed a lawsuit against major insurance companies and regulators over their failure to honour valid claims.
Joseph Waihuro Mwaura claims this has put millions of Kenyans at the risk of losing property and financial ruin despite their active policies.
Mwaura, who says he has a valid insurance policy for his vehicle, argues that despite paying premiums, he and other policyholders face legal action and harassment by auctioneers because insurers have failed to satisfy court-issued decrees for third-party claims.
The petition at the at High Court in Milimani challenges the Insurance Regulatory Authority (IRA) and four insurers, Resolution, Xplico, Invesco, and Directline Assurance, and the Attorney General.
He alleges non-compliance with Section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405. “The law is clear that insurers are obliged to settle third-party claims arising from motor vehicle accidents,” the petition states.
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“Yet, the failure by both the regulatory authority and the insurers has left policyholders vulnerable to arbitrary execution, humiliation, and financial loss, in blatant contravention of their constitutional rights.”
According to the petition, Resolution, Xplico, and Invesco were placed under statutory management due to financial difficulties, triggering a 12-month moratorium on claim payments.
“The moratorium and liquidation have left policyholders like me vulnerable to unlawful auctions, debt collectors, and potential loss of liberty. Section 10(1) of the Insurance Act clearly requires insurers to satisfy third-party claims, yet this legal obligation is being ignored,” he states.
Directline, which covers public service vehicles and motorcycles, is still operational but reportedly fails to pay claims promptly.
Mwaura says this negligence violates constitutional rights, including the right to property, human dignity, fair administrative action, consumer protection, and access to justice.
“Policyholders pay their premiums faithfully, yet the regulator and insurers have abandoned their duties. This undermines trust in both the insurance sector and the justice system.”
“Victims of road traffic accidents who hold valid court judgements are denied compensation for injuries, medical bills, or support for dependents. Policyholders who faithfully pay premiums are left to face financial and legal jeopardy.”
Justice Bahati Mwamuye directed the Attorney General, IRA, and the four insurers to file their responses by January 23. The case is scheduled for mention on February 25 for further directions.