20-year-old N5,000 third party vehicle insurance premium not good for today’s risks – Experts

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Chuks Udo Okonta

Insurance experts have implored Nigerians motorists to embrace the new premium and claims regime as the old N5,000 cost for third party vehicle insurance fixed in 2003, which is 20-year ago could no longer meet the present requirements for mitigating risks associated with vehicles.

Former Executive Secretary, Nigerian Council of Registered Insurance Brokers (NCRIB) Fatai Adegbenro, said the actions taken by the National Insurance Commission (NAICOM) would be beneficial to all the stakeholders, adding that postponing the implementation would have negative effects more on the motorists and the public that may suffer loss or damage as a result of putting vehicles on the roads.

He noted that the costs of vehicles and repairs have gone up astronomically as a result of inflation, hence, the need to have higher limits of third party limits of liability.

Naira note

He maintained that failure to do this might pose a great danger and embarrassment to all the stakeholders as the primary purpose of making the third party motor insurance compulsory may be defeated.

Adegbenro submitted that it is part of the primary responsibilities of NAICOM to protect the policyholders and the public that may suffer loss or damage.

“It is a step in the right direction that everyone should embrace and support.
If a motorist who cannot afford an extra ten thousand premium incurred a liability of N1.7 million or N2 million plus and the old policy limit was N1 million. How is such a negligent motorist able to raise the difference of either N700k or N1 million plus?” he enquired.

He wondered what will be the fate of the third party that has suffered the loss or damage if the negligent motorist cannot afford the extra payment to make good the lose suffered?

Another insurance expert, Omoya Lawrence, said the revised third party insurance tariff is overdue and NAICOM has taken a right step.

He noted that similarly the National Insurance Commission (NIC) in consultation with Ghana Insurer’s Association had revised the motor tariff upward due to the current economic challenges, adding that the implementation of the new motor third party in Ghana has commenced on January 1, 2023.

“This is second time the NIC will revised the premium within three years, but the interest of the consumers was taken into consideration in term of the percentage increase, wide public awareness and publicity,” he posited.

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