There are about 12 million vehicles on the roads in Nigeria, and according to reports, approximately 8.9 million of those vehicles have insurance plans that are fraudulent. To be more precise, it was discovered that just roughly 3,013,205 Third Party Motor plans are currently active, which means that there are still 8,986,795 million drivers operating motor vehicles in the country without valid, up-to-date insurance documentation. This latest information has continued to raise a great deal of worry among stakeholders in the insurance industry.
Despite the fact that the price of Third Party Motor Insurance in 2022 was capped at N5,000 for private motor and SUVs and N7,500 for commercial vehicles, many motorists choose to obtain fake insurance instead. This was due to its lower price tag, which often fell between N2,000 and N3,000. Motorists settle for this to avoid having complications with the law and because they aren’t aware of the wherefore and benefits of having original insurance coverage.
It’s compulsory to have a minimum of third party insurance cover.
After a review of the tariff by the National Insurance Commission (NAICOM) after longtime of conjecture, resulted in an increase from N5,000 to N15,000 yearly, which took effect early this year. Each subscriber can now claim up to N3 million in third-party damages, up from N1 million when the certificate had a price tag at N5,000. Be aware that Section 68 of insurance act 2003, outlined that it is compulsory for any vehicle owner to have a minimum of third party insurance coverage on the vehicle with an insurer registered under this Act before putting it on the road.
In her remark, Mrs. Yetunde Ilori, Director-General of the Nigeria Insurers Association (NIA), made a claim that only vehicles listed in the Nigerian Insurance Industry Database (NIID) had proper insurance papers, and that drivers who exhibited any other documents were either uninsured or using forged documents. Mrs. Ilori cautioned drivers to verify their insurance coverage via the USSD code *565*11#, saying that drivers without valid insurance certificates should not anticipate claims in the event of an accident.
Some choose to use fake insurers at the expense of valid ones.
As a consequence, she said, some Nigerians have raised the issue that some insurance firms are not paying claims, meanwhile they did not hold a valid document. She also mentioned that this happens sometimes when they don’t have real insurance from a legitimate provider, such as the N2,000 third-party car insurance issued at some licensing offices. During an event in Lagos dubbed “Evening with Brokers,” Rotimi Edu, president of the Nigerian Council of Registered Insurance Brokers (NCRIB), voiced his displeasure with the behavior of some drivers about the mandatory purchase of auto insurance.
According to him, the insurance industry loses billions of Naira annually because some drivers choose to use unregistered insurance companies, others drive without insurance, while some choose to use fake insurers at the expense of a valid ones. To help these drivers and other Nigerians see the value in insurance, Edu has urged the appropriate parties to raise awareness of it. He also recommended people engage with insurance brokers, who are in the best position to help them choose the most appropriate insurance coverage.
Government urged to enforce the purchase of mandatory insurance.
Chief Customer and Marketing Officer of AXA Mansard Insurance, Jumoke Odunlami, during the launching event of “Awoof Xtra promo for 3rd Party Motor Insurance policy,” called on government and law enforcement agencies to aid insurers by enforcing the purchase of mandatory insurance. This is necessary to inspire drivers and offer benefits that may propel them to adopt Third Party Motor Insurance in the country. In his opinion, proper law discharge and imposition of appropriate penalties on lawbreakers would compel road users to obtain valid insurance.
Related Link
NIID: Website
