Salifu Abubakari Explains the Risks of Insuring Stolen Vehicles in Ghana

The issue of stolen vehicles per investigation by EOCO in recent times, finding their way into Ghana’s roads and inadvertently into the insurance space is a problem that raises both legal and ethical concerns. To better understand how insurance companies in Ghana, particularly Priority Insurance Company Ltd, handle such cases, the Samuel Kwame Boadu and the sat down with Mr. Salifu Abubakari, General Manager for Business Development and Marketing at Priority Insurance Company Ltd who recently had training at Ghana Insurance College on "Fraud Prevention in the Digital Age"

This conversation sheds light on what happens when stolen vehicles are insured, what the law says about such transactions, and the potential implications for both the insured and the insurer.

The Insurance Law and Stolen Vehicles

According to Ghana’s Insurance Act, 2021 (Act 1061) and existing criminal laws, insurance contracts must be based on the principle of utmost good faith. This means that the person seeking insurance has a legal obligation to provide truthful and accurate information about the asset being insured.

Mr. Salifu Abubakari explained:
“If a vehicle is stolen and the new possessor knowingly or unknowingly insures it, the insurance policy is automatically void once it is discovered that the vehicle was not rightfully acquired. In essence, you cannot insure what you do not legally own. The law is very clear that an insurance contract built on fraud, misrepresentation, or illegality cannot stand.”

What Happens to the Insurer?

Insurance companies, like Priority Insurance Co. Ltd, are bound by both legal frameworks and regulatory oversight from the National Insurance Commission (NIC). In cases where a stolen car has been insured, Mr. Abubakari noted that insurers often face complicated situations.

“Once it is discovered that a vehicle is stolen, the insurance company must immediately cancel the policy. If a claim has already been made, that claim will not be honored. This protects the company from financial exposure and also upholds the integrity of Ghana’s insurance industry. However, the discovery process itself can be difficult, which is why insurers are strengthening their due diligence systems.”

Due Diligence and Technology

Mr. Salifu Abubakari highlighted that insurance companies are increasingly working with the Driver and Vehicle Licensing Authority (DVLA), the Criminal Investigation Department (CID), and other state agencies to cross-check vehicle ownership and legitimacy before issuing policies.

“Insurance Companies, we now integrate stronger background checks before policies are approved. This includes recording chassis and engine numbers for further investigations. Technology is changing how we protect ourselves and our customers from fraud and we are gradually including that in our Nhyira WhatsApp Chatbot.”

The Impact on Customers

For individuals who unknowingly purchase stolen vehicles, the consequences are severe. Not only do they risk losing the car when authorities trace it, but they also lose the insurance premiums paid.

Mr. Abubakari stressed:
“The public must be cautious when buying vehicles, especially imported second-hand cars. Always verify ownership and authenticity through proper channels. If a car is stolen, no insurance company in Ghana can be compelled to compensate the buyer.”

Implications for the Insurance Industry

The proliferation of stolen vehicles attempting to be insured undermines trust in the insurance sector. It also raises risks for brokers and agents who may unknowingly process such policies.

“Our brokers, agents and other insurance industry players are now being trained to conduct thorough background checks before submitting policies,” Mr. Abubakari added. “This is part of our wider commitment at Priority Insurance to not just sell policies, but to protect the integrity of the industry.”

Moving Forward

The conversation with Mr. Abubakari reveals a crucial reality: stolen vehicles remain a threat to both the insurance industry and unsuspecting customers. But companies like Priority Insurance Co. Ltd are taking proactive steps to minimize the risk.

In conclusion, Mr. Salifu Abubakari reminded the public:

“Insurance is about trust, transparency, and protection. If the foundation of that trust is compromised by stolen property, then the whole contract collapses. At Priority Insurance, we will continue to educate our customers, strengthen verification systems, and work with regulators to safeguard the sector.”

This editorial featured on Accra Street Journal as " Priority Insurance’s Salifu Abubakari on Risks of Insuring Stolen Vehicles" serves as both an awareness campaign for the public and a spotlight on how insurers in Ghana are tightening their systems against fraud in the motor insurance sector. For Insurance policies and insurance news, you can get more on Accra Risk Journal on Accra Street Journal