How motorists with valid insurance policies ignorantly beg during accident

A bus driver begging on the road.

Insurance helps in the transfer of risks through payment of premium. It is therefore unimaginable to see motorists with valid insurance policies, which have enabled them transferred their risks to insurers, begging on the road when their vehicles hit other motorists. Chuks Udo Okonta in this report writes on how this ugly trend can be addressed.

The journey embarked by the Insurance Editor of NewsPage Media, Sola Alabadan, on August 9, 2022, from Lagos to Ekiti State was going on well until a Toyota Sienna vehicle with Registration number GGE970GB, suddenly hit his car from the back and pushed him under a trailer in front of him.

He escaped death by whiskers as the windsreen of his vehicle was shattered, while the bonnet and the bumper were damaged completely.

According to him, immediately the accident happened, he thought the end had come as he could not see anything for some seconds.

Although he was injured , he said tiny broken glass splashed on his body, and he expressed fears that some of the broken glasses would had pierced through his body.

Having fully regained consciousness, he alighted from his vehicle, approached the driver of the Toyota Sienna, who went on his knees begging as a sign of admission of his fault. He was begging while seeking from Alabadan on how they could fix his damaged vehicle.

Sola Alabadan’s damaged car.

Alabadan, who is an experienced insurance editor and understands the principles of insurance asked him if his vehicle has the minimum third party insurance cover required by the law and the driver said yes.

According to Alabadan, in spite having the third party vehicle insurance policy, the driver was still beging and was in doubt that the paper could translate into settlement of the amount to be incurred in fixing the damaged vehicle.

To confirm the genuiness of the insurance certificate, Alabadan said he had to visit the website of the Nigerian Insurance Industry Database (NIID) which showed that the vehicle was insured by a licensed Insurance Company.

He said findings from the NIID also revealed that the insurance certificate was issued on December 17, 2021 and was to expire on December 16, 2022.

With the result from NIID, Alabadan and the driver exchanged phone contacts, moved his vehicle from the scene of the accident and reported the accident to the insurer.

Thereafter, as a professional, Alabadan helped the driver to provided all the documents required by the insurer and been satisfied with the documents provided the claims for the third party was paid to the amazement of the motorist who never believed that what he considered just an ordinary paper could save him from paying huge sum of money to fix Alabadan’s vehicle.

Joe Ibe, would never forget how he was unable to get to the venue of a job interview at the time stipulated by an employer due to traffic caused by an accident on the ever busy Third Mainland Bridge in Lagos.

He woke up early, got all his documents ready for the interview, went out and boarded a commercial vehicle heading to Victoria Island. Just few kilometers in the journey, the vehicle ran into a traffic which Ibe and other commuters thought was the usual traffic that would be over within few minutes. As the vehicle moved slowly, minutes turned into hours while their destination was still very far.

Ibe became agitated after he had spent hours in the traffic and time for the interview was ticking. He could not alight to seek alternative as the Lagos State Government has banned motorcycle riders from plying major roads in the state.

Ibe tarried in the vehicle until they got to the scene of the accident that caused the traffic. As all the embittered
commuters looked to ascertain what really happened, they saw a cab driver on his knees begging a Toyota Prado owner, who he hit his vehicle and caused great impact on the Prado.

The cab driver was not as lucky as the driver that hit Alabadan’s vehicle, who was saved by Alabadan’s knowledge of the working of insurance and stopped the driver from beging since he had a valid insurance cover.

Owing to ignorance the cab driver and the Prado owner caused terrible traffic which would have been avoided by just verification of the cab driver’s insurance papers.

These occurrences are what most road users in Nigeria encounter almost everyday as they move from one destination to another. They are forced to suffer for the ignorance of uninformed motorists, who have valid insurance policies, but resort to fighting and begging whenever they encounter an accident.

Creating enhanced claims value for motorists

NAICOM in its determination to create more value for motorists had on January 1, 2023, increased premium of private third party motor insurance policy from N5,000 to N15,000 and Third Party Property Damage (TPPD) limit from N1 million to N3 million.

Sunday Thomas

The approval was contained in a circular entitled; New Premium Rate for Motor Insurance: numbered: NAICOM/DPR/CIR/46/2022, dated; December 22, 2022; signed by the Director, Policy and Regulation, NAICOM, Leo Akah for the Commissioner for Insurance Sunday Thomas and sent to all insurance Institutions.

NAICOM stated that pursuant to the exercise of its functional of approving rates of insurance premium under Section 7 of NAICOM Act 1997 and other extant laws, the commission hereby issued this circular on the new motor insurance premium rates effective from January 1, 2023.

NAICOM pegged N3 million Third Party Property Damage (TPPD) limit for private motor; N5 million limit for own goods, with premium of N20,000; staff bus premium, N20,000 and TPPD, N3 million.

For commercial vehicles, trucks/general cartage has TPPD limit of N5 million, premium N100,000; special types, TPPD limit of N3 million, premium N20,000; tricycle, TPPD limit N2 million, premium N5000 and motorcycle, TPPD limit N1 million; premium N3000.

The insurance industry regulator submitted that comprehensive motor insurance policy premium rate shall not be less than five per cent of the sum insured after all rebates or discounts.

Speaking on the value created by the new premium and claims regime, the former Executive Secretary, Nigerian Council of Registered Insurance Brokers (NCRIB) Fatai Adegbenro, said the action taken by the National Insurance Commission would be beneficial to all the stakeholders, adding that as the costs of vehicles and repairs have gone up astronomically as a result of inflation, there is the need to have higher limits of third party limits of liability.

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 would 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?

Impact of low insurance education

Most of the ugly behaviours exhibited by motorists on the road when an accident happens, often stem from low level of insurance awareness. This has also led to the menace of fake insurance particulars.

Stakeholders believed the insurance industry is losing a whopping N160 billion annually to fake motor insurance racketeers in the country, even as the sector recorded N45.3 billion gross written profit as at third quarter of 2022.

The president, Nigerian Council of Registered Insurance Brokers (NCRIB), Barrister Rotimi Edu, who expressed worry on the loss of revenue in the sector, said the expected annual premium income of insurance industry is being crippled by losing a whopping N160 billion annually to fake motor insurance racketeers in the country.

NCRIB President, Rotimi Edu

Edu noted that, it is disheartening to note that an industry which had been contributing less than one per cent to the gross domestic product, in spite of its huge potentials, loses such whopping amount of money to fake vendors who contribute nothing to the growth of the nation.

“It was recently reported that Nigeria Insurance Industry loses over N160 billion yearly to fake motor insurance racketeer. Some of these fake racketeers have their offices in some local government secretariats across the nation, carrying out their unethical acts unabated.

“Aside from loss of revenue and premium that should accrue to the industry, these criminals create for us a bad image. Most of the unattended claims in Motor Insurance are victims of fake certificates,” he pointed out.

He stressed that, it is saddened to note that most motorists go about their daily businesses with certificate of moribund and deformed insurance companies, just because there is no proper enforcement, adding that, some of these insurance policies, flying around local government premises across the country, are just putting money into people’s pocket.

“I am certainly aware that the Nigerian Insurers Association(NIA) deployed technology to curb proliferation of fake certificates. But I am of the opinion that enforcement is still at low ebb. May I use this medium to appeal to Government to wade into the situation and curb the perpetrators,” he pleaded.

While equally pleading to Vehicle Inspection Service (VIS) to see this as a clarion call, he believes the agency can as well increase its enforcement strategies to include Insurance Certificate in such a way that any motorist without genuine motor insurance certificate should be made to face sanctions as stipulated in the law.

Our economy continues to drag because we are not paying attention to the issue of insurance, he stressed.

Need for more insurance education

Experts have continued to canvassed need for insurance awareness and education to enable motorists who are ignorant of the value of their insurance policies to stop causing unnecessary scenes on the roads.

Head, Corporate Communication, Polaris Bank Limited and President, Association of Corporate & Marketing Communications Professionals in Banks (ACAMB), Rasheed Bolarinwa, on how to improve insurance education, called for the creation of a dedicated jointly owned media vehicle by all stakeholders in the nation’s insurance industry that would serve as news agency on insurance content which would be shared with other media houses.

Rasheed Bolarinwa

“There is a need for a deliberate collaborative campaign for national awareness about the importance of insurance.

“A dedicated jointly owned media vehicle should be created by all stakeholders to serve as a news agency on insurance content shared with other media houses.

“Regulatory bodies in the Nigerian insurance industry are expected to partner the Nigerian media industry towards creating a diverse and inclusive newsroom; that has content development and coverage strategy that builds audience trust in insurance and provides for a better representation of different societies,” he posited.

Speaking on issues militating against insurance culture in Nigeria, Bolarinwa, identified, doubts about insurance companies, hostile economy, trust issues emanating from hidden clauses, inadequate access to Information Technology, weak regulatory framework, lack of skilled personnel and poor awareness of insurance services by the prospective assured, among other factors.

”The response that follows the mention of insurance or insurance companies to an average Nigerian is predictable. Negative reactions and lukewarm attitude are the kinds of feeling that come with an invitation to insurance policies. This informed the low patronage and acceptance of insurance companies operating in Nigeria.

“This untoward reaction and attitude by Nigerians may not be unrelated to the poor attitude of the insurers towards the often repeated chorus of refusal to pay claims. Some insurance companies have truly developed a bad reputation for defaulting in the payment of claims. This unfortunately grew to become a negative public emblem that hangs beside their corporate identities. Invariably, the industry and the nation’s depleting Gross Domestic Product (GDP) are big losers.” he said.

Stressing on the need to demystify insurance to take its pride of place in the nation’s economy, the communications expert said, “Insurance will only take its pride of place as a big contributor to the nation’s Gross Domestic Product (GDP) as it applies in other jurisdictions when all stakeholders in the risk ecosystem are deliberate, consistent and methodical in simplifying what insurance is all about in words and deed. Firstly, there must be a unanimity of purpose to bake insurance and make it BI enough for all to benefits from the expected windfall.”

Bolarinwa proposed that insurance should be presented as a lifestyle, adding a significant value, enhancing life and living.

He said there should be creative and interesting story-telling narratives delivered with moving and crisp visuals across digital and traditional platforms with strong orchestration and amplification.

He said a ‘Top Of Mind Awareness (TOMA) is needed for the immense opportunities in the sector to be unleashed.

Benefits of insurance education

Informed policyholders over the years have continued to harness the benefits of insurance, leveraging insurance to mitigate their risks.

One of those who understood the workings of insurance and benefited from it is award-winning skit maker and public figure, Emmanuel Chukwuemeka Ejekiru,
popularly known by his stage name, Oga Sabinus, who got an insurance claim worths N35,114,625.00 from Allianz Nigeria Limited.

Oga Sabinu (middle) taking delivery of the car.

His new Mercedes Benz GLE 450 SUV was involved in a road crash and the vehicle was a write off, but thankfully, there were no fatalities.

Oga Sabinus having filed his claim and was settled, expressed satisfaction that the claim was settled promptly, with the help of his intermediary, Autocheck.

He praised Allianz Nigeria for offering authentic and reliable car insurance products, encouraging motorists to insure with such a reputable insurance provider.

Another beneficiary of insurance is a Banker, Okoro Peter, who insured his vehicle, a Range Rover 2018 model at about N70 million with a comprehensive insurance cover of about N2 million.

Okoro went on to renew his policy in the second year, meaning he had insured the vehicle for two years.

In the second year, his wife drove the vehicle out for grocery shopping at a supermarket where she parked it.

Okoro’s damaged Range Rover.

Suddenly, a tanker driver lost control and crashed the tanker into the vehicle where it was parked along with three other vehicles.

Alas, the tanker and the driver were not insured. Okoro and his wife were devastated and traumatized.

He contacted his insurance company, SUNU Assurances Nigeria Plc to seek compensation (indemnity) and in fact sought to have a new vehicle, because the damage destroyed the whole back side of the vehicle.

SUNU upon validating Okoro’s claim agreed to buy him a vehicle, exactly like the accidented vehicle subject to the limit of the sum Insured.

Excited, Okoro praised the insurance company stating that the experience is the best he has had in his life.

He said SUNU helped his family not to suffer depression as his wife was greatly traumatized after the accident.

The Managing Director of the company, Samuel Ogbodu, said Nigerians should take advantage of insurance in their day-to-day activities, noting that insurance is very good.

He said the company had paid a total of N1.14 billion claims to the insured as at September 2022 and would continue to pay more.

He further advised Nigerians not wait to have a bad experience before keying into insurance.

“Insurance is a way to manage your risk. When you buy insurance, you purchase protection against unexpected financial losses. The insurance company pays you or someone you choose if something bad happens to you.

“If you have no insurance and an accident happens, you may be responsible for all related costs,” he added.

Knowledge properly harness is said to be power, this there necessitates the need to conduct coordinated insurance awareness and education for all policyholders especially motorists to enable the understand the value of their policies, thereby making them stop fighting and begging on the roads whenever there is an accident, but contact their insurance firm to report the canage.

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