Comprehensive Motor Insurance Demand in Ghana: Evidence From Kumasi Metropolis

Abstract

This study examines the determinants of comprehensive motor insurance demand in Ghana. Data was collected fro m private car o wners who were registering their vehicle at Driver and Vehicle Licensing Authority (DVLA) regional office in Ku masi. The study used logit model to assess factors influencing demand for co mprehensive motor insurance. The results revealed that, demand for co mprehensive motor insurance is significantly influenced by income, value of the vehicle, age of the vehicle, perception of the premiu m and claim procedure. The p rice of co mprehensive motor insurance negatively affected the demand. Generally, wealthy people and individuals who used bank loan to purchase vehicle are mo re likely to purchase comprehensive motor insurance. In addition, claim p rocedures and the premiu m if perceived satisfactory would improve demand for co mprehensive motor insurance. Hence to encourage demand for co mprehensive motor insurance, insurance companies should target wealthy car owners and individual who use bank loan to purchase their vehicles. In addition insurance companies should reduce the time taken to process claims. Finally policy makers should place emphasis on designing comprehensive insurance with attractive premiu m. Results of this study will be useful to insurance co mpanies in improving demand for co mprehensive motor insurance.. The information would also benefit stakeholders in the insurance industry in Ghana especially policy makers as how to improve demand for comprehensive insurance in a sustainable manner.