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
Over 8.9m vehicles have fraudulent insurance – Drivers can verify their insurance coverage via USSD code *565*11#. – Express your point of view.
Apart from most drivers getting fake third party insurance, when it is time for claims the insurance makes it complicated for drives and as such most drivers prefer to avoid it or go for cheap ones despite the fact that it cost just only between #5,000 to #15,000.
Actually, this issue of insurance needs to be campaigned for, for people to be aware of it’s benefits. It is very bad that some people use fraudulent insurance, it is not proper at all. Also, it will be inadequate for government to make insurance mandatory.
It’s concerning to hear that over 8.9 million vehicles in Nigeria have fraudulent insurance coverage. This can have serious consequences for drivers, passengers, and other road users, as well as for the broader economy and society. In the event of an accident or other incident, drivers with fraudulent insurance coverage may find themselves without the protection they need, which can lead to financial hardship, legal problems, and other negative outcomes. It’s important for drivers to verify their insurance coverage to ensure that they are protected and to help reduce the prevalence of fraudulent insurance. The USSD code *565*11# can be a useful tool for drivers to quickly and easily check their coverage. It’s also important for governments and insurance companies to work together to address this issue and to develop policies and programs that help to reduce fraud and improve access to affordable and reliable insurance coverage. This can involve investing in technology and infrastructure, improving regulatory frameworks, and increasing public awareness of the importance of insurance coverage.
there needs to be a campaign for this insurance issue so that people are aware of its advantages. The fact that some people utilize false insurance is quite regrettable; it is not right at all. Additionally, requiring insurance would not be sufficient on the part of the government.
Drivers should check their insurance policies to make sure they are protected and to lessen the occurrence of fake insurance. To quickly and simply check their coverage, drivers can use the USSD code to check In order to solve this problem and create laws and programs that aid in reducing fraud and enhancing access to reasonably priced and trustworthy insurance coverage.
In order to raise awareness of the benefits of insurance, an initiative is required. It is quite terrible that some people use fraudulent insurance; it is not at all right. Furthermore, Drivers can verify their insurance coverage via USSD code