The Over-Searching Accidents Causative Factors in Ghana: The Role of Policyholders Education Levels

Abstract

Available statistics indicates that about 90% of all claims or accident in Ghana is caused by human behavior. Therefore, policyholders’ errors are categorized depending on the severity and extend of casualties caused as a result of misinterpretation of road traffic control devices based on their education levels. Hence, in order to ascertain all the possible causes within the human element to reduce the increasing trend of yearly claims, this study report on the influence of education levels on accident/claims frequency and severity drawing upon a purposive sample of 203 policyholders who have experienced at least one accident in a year using structural equation modeling (SEM). The findings from our regression weights gave enough evidence to reject most of our hypotheses with few ones being supported. This study provides enough evidence that education generally to perspective policyholders influence accidents/claims occurrence. However, in terms of education levels of policyholders, we did not have enough evidence in support of any of these levels either causing or reducing claims/accident frequency. Besides accident/claim frequency, we extended our regression analysis on claim severity and also included some well know auto insurance rating factors to ascertain their impacts on accident frequency. Consequently, it was revealed that most of the severe claims or accidents that results into deaths and serious injuries on yearly basis are caused by policyholders or drivers with medium level of education in Ghana with its frequency driving mostly by rating factors such as the vehicle’s age, cubic capacity, mileage, etc.

Exploring the Effects of Classical Auto Insurance Rating Variables on Premium in ARDL: Is the high Policyholders’ Premium in Ghana Justified?

“…These significant values at a 5% level also indicate that the vehicle’s age at lag (1) for comprehensive and lag (1)-(3) jointly for the third-party have short-run causality on Premium. Thus, policyholders with older cars pay higher premiums because older cars have high accidents rate (Awunyo-Vitor, 2012; Jacob et al, 2020). This finding which correlates with the markets’ practice contradicts Ayuso et al (2017), who posits non-linear relationship between auto age and accidents occurences.…”