Comprehensive Motor Insurance Demand in Ghana: Evidence From Kumasi Metropolis

This study examines the determinants of comprehensive motor insurance demand in Ghana. Data was collected from private car owners who were registering their vehicle at Driver and Vehicle Licensing Authority (DVLA) regional office in Kumasi. The study used logit model to assess factors influencing demand for comprehensive motor insurance. The results revealed that, demand for comprehensive motor insurance is significantly influenced by income, value of the vehicle, age of the vehicle, perception of the premium and claim procedure. The price of comprehensive motor insurance negatively affected the demand. Generally, wealthy people and individuals who used bank loan to purchase vehicle are more likely to purchase comprehensive motor insurance. In addition, claim procedures and the premium if perceived satisfactory would improve demand for comprehensive motor insurance. Hence to encourage demand for comprehensive 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 premium. Results of this study will be useful to insurance companies in improving demand for comprehensive 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.