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Third-party Vehicle Insurance rise by 200%

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By Okunloye Abiodun

NAICOM’s new vehicle third-party insurance rate is now mandatory for motorists.

In a circular distributed to all insurance companies in the country, the federal government of Nigeria announced a significant increase in the premium rates that motorists in Nigeria are required to pay for mandatory vehicle third-party insurance. The National Insurance Commission (NAICOM), which regulates the insurance industry, has declared that the new rates will go into effect on January 1, 2023. As opposed to the previous rate of N5,000, owners of private vehicles will now be required to pay N15,000 for Vehicle Third-party Insurance.

Due to the new premium rates, the mandatory third-party insurance for motor vehicles has increased by 200 percent. Last year, the commission and the chief executives of insurance companies across the nation discussed the possibility of raising premium rates and formed a committee to investigate the matter. Recently, the commission made the announcement that the new rates had been approved, and it also distributed a directive regarding compliance with the new rates to all of the chief executives of insurance companies in the country.

Once effective, failure will risk regulatory sanctions.

This approval was included in a circular titled “New Premium Rate for Motor Insurance” and signed by Leo Akah, NAICOM’s Director of Policy and Regulation, on behalf of the Commissioner for Insurance. In accordance with its statutory authority to approve insurance premium rates under Section 7 of the NAICOM Act 1997 and other applicable laws, the commission subsequently issues the above notification on the new vehicle insurance premium rates effective as of January 1, 2023. It issued a warning that failure to abide by the circular would result in the necessary regulatory penalties.

There will be a premium of N20,000 for private vehicles transporting their goods, N20,000 for staff buses, N100,000 for trucks as well as general cartage, N20,000 for a special type of cargo vehicle, N5,000 for tricycles popularly known as Keke Napep, and N3,000 for motorcycles called Okada, as stated by NAICOM. According to NAICOM, the Third-party Property Damage (TPPD) limit for private vehicles is now N3 million instead of N1 million, and the limit for own goods is N5 million with a premium of N20,000. The N20,000 premium for staff buses entitles them to N3 million claims payments.

Vehicle owners will be protected against damage or lawsuit.

The commission has also raised the TPPD claims limit from N1 million to N5 million for commercial vehicles, trucks, and general cartage, with a corresponding increase in premium of N100,000. For special types, the TPPD limit is now N3 million with a corresponding increase in premium of N20,000. For a premium of N5,000, NAICOM has set the TPPD limit for tricycles at N2 million, while for motorcycles it is set at N1 million. It was also stated that after taking into account any discounts and rebates, the premium for a fully comprehensive auto insurance policy could be at least 5% of the total amount insured.

Owners of motor vehicles operating on Nigerian roads are required by law to carry third-party liability insurance, per the Motor Vehicles (Third Party Insurance) Act of 1950. The purchaser of a third-party insurance policy does so to protect themselves from potential lawsuits filed by unrelated third parties. The insured has legal responsibilities for any damages that may be awarded to a third party as a result of the insured’s negligent operation of the vehicle, including damages for the third party’s death or bodily injury and any damage caused to their property.

Third-party car usage should be insured by the Act.

Moreover, the Insurance Act, 2003, section 68 stated that (1) “No person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability which he may thereby incur in respect of damage to the property of third parties is insured with an insurer registered under this Act.” The Motor Vehicles (Third Party) Insurance Act section 3 (1) also contains a similar rule that states: “Subject to the provisions of this Act no person shall use, or cause or permit any other person to use a motor vehicle unless there is in force about the user of that motor vehicle by such person or such other person as the case may be such a policy of insurance or such a security in respect of third party risks as complies with the provisions of this Act.”


Related Link

NAICOM: Website

Snopes.com


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Ask Nigeria
Admin
1 year ago

Third-party Vehicle Insurance rise by 200% – NAICOM’s new vehicle third-party insurance rate is now mandatory for motorists. – Express your point of view.

Abusi
Abusi
Member
1 year ago

This is a very nice development. People can help others insure their vehicles and their beneficiary will enjoy the benefits. It shows we are also evolving in our country. Insurance is a way to curtail foreseeable risks.

Tonerol10
Tonerol10
Member
1 year ago

Third-party Vehicle Insurance rise by 200%. Very good to have third party vehicle insurance that added up for good

Taiwoo
Taiwoo
Member
1 year ago

The Nigerian federal government recently announced a substantial hike in the premium rates that motorists in Nigeria are expected to pay for mandatory vehicle third-party insurance and this increase is effective immediately.

Iyanu12345ogg
Iyanu12345ogg
Member
1 year ago

The importance of the third party insurance is good. It gives everyone chance to enjoy the offer with great benefits. It’s a great development on the country’s end.

Godsewill Ifeanyi
Godsewill Ifeanyi
Member
1 year ago

The National Insurance Commission, which is in charge of regulating the insurance business, has announced that the newly revised premiums will become effective as of the beginning of the next policy year.

Kazeem1
Kazeem1
Member
1 year ago

Because of the new premium rates, the required amount of third-party insurance for motor vehicles has grown by a factor of two hundred percent.

Chibuzor
Chibuzor
Member
1 year ago

There was talk of possible premium rate increases, so the commission and insurance industry CEOs across the country organized a committee to look into the issue.

Haykaylyon26
Member
1 year ago

This is a nice innovation third party vehicle insurance now rise up this Insurance will help people in great way and people can hep insure other people vehicle we are making progress in the step of building the country in the right part

Ultra0711
Ultra0711
Member
1 year ago

The value of third-party coverage should not be underestimated. In this way, everyone has a fair shot at taking advantage of this fantastic opportunity. The country’s progress has made enormous strides forward.

Christiana
Christiana
Member
1 year ago

Nigerian motorists’ mandated car third-party insurance premiums were recently raised by the federal government.

Tolaniiii
Tolaniiii
Member
1 year ago

It’s good to have third-party insurance. It lets everyone enjoy the offer’s benefits. It’s excellent for the country.

jdpumping
Member
1 year ago

which one is third party vehicle insurance again compulsory for motorist every day with different measures and laws imposed on motorist.

Bola12
Bola12
Member
1 year ago

The Nigerian federal government recently announced a significant rise in mandatory automobile third-party insurance premiums, beginning immediately.

theApr
theApr
Member
1 year ago

In addition to announcing the approval of the new prices, the commission also sent an order requiring compliance with the new rates to all of the country’s insurance company CEOs.

Remi1
Remi1
Member
1 year ago

The TPPD claims maximum for commercial vehicles, trucks, and general cartage has also been increased by the commission from N1 million to N5 million, with a matching increase in premium of N100,000.

DimOla
DimOla
Member
1 year ago

This is seriously and big problem in this country. Why is Government making life difficult for the masses. Why should government raise the third party vehicle insurance by 200% amidst this inflation? Very insensitivity government.

SarahDiv
Member
1 year ago

How can a government just increase third party vehicle insurance by 200% despite the inflation and current situation of the country. The increase shouldn’t be sudden but gradual.