5. Persons Protected.

The beneficiaries include pedestrians, passengers, cyclists, other motorists, road users generally, dependents of deceased victims. The insured person is not the beneficiary of compensation under third-party insurance except to the extent that the insurer indemnifies the insured against legal liability to third parties. 

6. Duties of the Insured. 

The Act imposes several statutory obligations including, obtaining valid insurance before using the vehicle, displaying the insurance certificate where required, notifying the insurer of accidents, cooperating in investigations, providing truthful information when procuring insurance, and false statements intended to obtain insurance constitute an offence. 

7. Duties of Insurance Companies.

Insurers are required to issue certificates of insurance, honour legitimate third-party claims, investigate accidents, satisfy judgments within the limits of the policy, underwrite compulsory third-party insurance where licensed to do so, the Regulations also require timely settlement of claims and prescribe premium structures and liability limits. 

8. Protection of Third Parties. 

One of the strongest consumer-protection features of the Act is that certain policy conditions cannot defeat the rights of innocent third parties after an accident. 

Thus, an insurer cannot rely on some contractual breaches by the insured to avoid paying a qualifying third-party victim where the Act renders such conditions ineffective against that victim, although the insurer may later recover from the insured in appropriate circumstances. 

9. Process of claim after an accident. 

The following outlines the general process provided for under the Act and its Regulations; 

a) Report the accident immediately.

• The driver should report the accident to the nearest police station, especially where there is death, bodily injury, or significant damage.
• A police report is important because it provides evidence of the accident and its circumstances. 

b) Notify the insurer without delay.

• Under Section 9 of the Act, the owner of the vehicle must give written notice to the insurer as soon as possible after becoming aware of the accident.
• The notice should include the date and time of the accident, place where it occurred, nature of the accident, and circumstances surrounding the accident.
• The insured must also provide any additional information the insurer reasonably requests. Failure to notify the insurer may allow the insurer to recover losses incurred because of that failure. 

c) Submit the claim.

The claimant should lodge a claim with the insurer together with supporting documents, which commonly include claim form, police accident report, medical reports and treatment records (where injuries occurred), death certificate and letters of administration (where the victim died), witness statements, if available, and any other evidence requested by the insurer. 

d) Investigation by the insurer

• The insurer investigates the claim by examining the accident circumstances, reviewing police findings, assessing medical evidence, and confirming that the policy was valid at the time of the accident.

e) Legal action by the third party.

• Under Section 39, a third party normally sues the owner or driver of the vehicle, not the insurer directly.
• Once liability is established by the court or through settlement, the insurer satisfies the claim to the extent required under the policy and the Act.

f) Settlement of the claim.

• The insurer may negotiate and settle the claim where appropriate.
• The Motor Vehicle Insurance (Third Party Risks) Regulations require insurers to settle claims within 60 days after notification, provided there is no valid dispute. If there is a genuine dispute, settlement should be made within 30 days after the dispute is resolved.

g) Where the vehicle is uninsured or cannot be identified

• The Act also contains provisions for accidents involving unidentified (hit-and-run) vehicles or uninsured vehicles whose owner or driver cannot be identified.  In such cases, a claimant may seek compensation through the mechanism established under the Act (historically the Nominal Defendant Council provisions), subject to the statutory notice requirements, including giving written notice within the prescribed period.

h) Rights of Third Parties.

The Act gives third parties statutory rights to compensation where negligence is established, the vehicle was insured, bodily injury or death occurred and legal liability exists. The insurer’s obligation arises by statute once the insured’s liability is established within the scope of the Act.

i) Nominal Defendant Council.

Part III of the Act establishes the Nominal Defendant Council whose purpose is to compensate victims where the offending vehicle cannot be identified (for example, a hit-and-run), the vehicle was uninsured, the owner cannot be traced.

The Council therefore acts as a statutory safety net to prevent deserving victims from being left uncompensated solely because no identifiable or insured defendant is available.

However, the Nominal Defendant Council is suspended under Section 42 that suspended sections 15-36 of the Act.

j) Compensation Limits.

Under the current Regulations, liability is capped at UGX 1,000,000 per injured or deceased person, and UGX 10,000,000 aggregate per accident. From a legal and policy perspective, these limits have long been criticised as inadequate given inflation, rising medical costs, and the increasing value of court awards for personal injury.

k) Offences Under the Act.

The Act creates offences including driving without insurance, making false statements to obtain insurance, intentionally avoiding policy obligations, and failure to comply with statutory requirements. These offences attract criminal sanctions in addition to any civil liability.

l) Civil Liability.

The Act does not replace the law of negligence. Instead, it complements it. An injured party must still establish duty of care, breach of duty, causation and damage. Once liability is established, the insurer is obliged to meet qualifying third-party claims within the statutory framework.

m) Strengths of the Act.

The Act has several notable strengths like compulsory insurance protects innocent victims, insurers are legally obliged to meet qualifying liabilities, victims have recourse even where motorists lack financial means, the Nominal Defendant Council addresses uninsured and unidentified vehicles, statutory restrictions protect third parties from unfair contractual exclusions, and the Act promotes safer and more responsible road use.

n) Emerging Developments.

Recent reforms include digital motor insurance verification, electronic insurance stickers, stronger regulatory oversight by the Insurance Regulatory Authority, enhanced verification by enforcement agencies.

o) Recommendations.

The Act would benefit from increasing statutory compensation limits to reflect present-day economic conditions, introducing mandatory timelines with stronger enforcement for settlement of claims, expanding public education on motor third-party insurance, strengthening penalties for driving uninsured, modernising claim-processing procedures through digital systems, reviewing the effectiveness and funding of the Nominal Defendant Council.

Conclusion

The Motor Vehicle Insurance (Third Party Risks) Act is a cornerstone of Uganda’s road traffic compensation framework. Its central purpose is to ensure that victims of motor vehicle accidents who suffer death or bodily injury are not deprived of compensation because of the financial position of the person responsible for the accident. The Act imposes compulsory insurance obligations, regulates insurers, protects third parties against certain contractual exclusions, and establishes a statutory mechanism to compensate victims of uninsured or unidentified vehicles.

The statutory compensation limits appear outdated when measured against current medical expenses and judicial awards, and greater efficiency in claims administration would enhance access to justice. Overall, the Act remains an essential piece of social welfare legislation that balances the interests of motorists, insurers, and the wider public while promoting accountability on Uganda’s roads.