Sudan Democracy First Group

Petty Corruption Stories from Sudan: Car Insurance Corruption


According to the Secretary General of the Insurance Companies’ Association (ICA), there are about 1500 types of insurance in Sudan. Of these, car insurance is the most prominent type due to the increase in the number of cars on the street and the strict regulations by traffic police. The increase in the number of people who own cars is due to the relatively higher standard of living in towns as well as to the easiness of obtaining car loan from banks.

Generally, there are two types of car insurance in Sudan: comprehensive and liability. Liability insurance covers damages of cars or persons involved in accidents, but does not cover damages sustained by the insured car. Liability insurance is compulsory, because articles 58 and 69 of the Traffic Acts of 1983 and 2010 respectively, require car owners to obtain liability insurance before they are able to complete the registration of their cars. Comprehensive insurance on the other hand, in addition to liability (third party) coverage, also covers damages sustained by the insured car, whether the driver is at fault or not. While the premium and monthly installment for comprehensive insurance is subject to the value of the car, liability insurance is a flat rate set by insurance companies that currently ranges between 115 to 130 SDG.


Compensation for those with liability insurance is normally determined and enforced by the Traffic Courts against the insurance company and in favor of the drivers considered not at fault. However, financial compensation for those with comprehensive insurance requires adherence to the following rules and procedures of the ICA:

  • The driver or owner of the car must report the accident to the insurance company and present a valid insurance policy, the date and time of the accident and the traffic police report.
  • The drivers or owner must complete relevant claim forms at the insurance company’s office.
  • The driver must present a valid drivers license at the time of the accident.
  • A representative of the insurance company must assess the damage to the car and decide on whether the car is repairable or a total loss. If repairable, the insurance company’s engineers must decide on the damage that needs to be repaired, including if any replacement parts are needed. However, if it is a total loss, the insurance company must compensate the owner the value of the car after the deduction of usage depreciation which usually range between 20 and 30%.
  • The insurance company must oversee the repair of the car.
  • If the repair of a damaged car costs more than 50% of it’s value, the insurance company may rule it a total loss.

The Shiekan Insurance Company in Medani uncovered a number of corrupt practices when investigating financial compensation for insured cars. Two senior employees of the company, the head of the Compensation Department and the senior damage assessment engineer, in collaboration with a contracted car repair workshop, planned and executed several schemes. The first involved the inflation of the damage sustained by the car in question. The head of the Compensation Department completed compensation forms in ways that inflated the damage sustained by the car as recorded in accident reports prepared by the traffic police at the time of the accident. The damage assessment engineer then approved these forms, and delivered them to the repair workshop. The workshop owners would then estimate the cost of repair based on these fraudulent forms, in turn inflating the cost of repair. The difference between the real cost of repair and the inflated estimate would then be skimmed and divided between the three collaborators.


Another scheme involved cars deemed too damaged to be repaired. In these cases, the damage assessment engineer would rule the car a total loss case and, in coordination with head of the Damage Compensation Department and the owner of the repair workshop, auction the car to the owner of the repair shop who, in turn, would sell the car after necessary repairs and divide the profit between the three collaborators. The insurance company in this scenario incurred major financial losses when it paid the value of the car to the owner but received a cheap price for the car when sold at auction.


These types of corrupt practices in the insurance sector affect both the insurance companies and the insured. Most insurance companies may decide to raise car insurance to compensate for such financial losses, which will negatively affect drivers and complicate the process of obtaining car insurance.


The insurance companies may need to implement certain measures to curtail these practices for the benefit of both the insured and the company:

  • Introduction of a system that verifies and compares the accuracy and authenticity of the Damage Assessment Form, prepared by the company’s engineer and head of the Damage Assessment Department, against the accident report prepared by the traffic police, by a third party.
  • Initiate a bidding system to select a reliable repair shop instead of relying on a single repair shop.
  • The establishment of strong internal audit system that conducts regular reviews of the insurance company’s financial and administrative procedures.
  • Demand proper and technically sound accident reports from the traffic police department. In many of the corrupt cases, the insurance company discovered that the initial accident reports were prepared by police drivers who were not necessarily technically qualified to assess the damage incurred by cars in an accident.
  • Raise the awareness of insured clients and ordinary citizens about insurance, particularly car insurance, and how to identify corrupt officials.

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