As many Nigerians grapple with challenges, occasioned by the economic situation, insurance has remained a major source of succour to those who embraced it. Chuks Udo Okonta, in this report writes on how insurance is helping vehicle owners, amid soaring cost of acquiring either new or used ones.
Buying a vehicle – old or new, has presently become a bit difficult for most Nigerians owing to soaring cost. This has forced many vehicle owners to be very careful not to lose what they have.
Retaining and maintaining vehicles have not been so easy, as cost of spare parts has continued to soared. But thanks to insurance, which has being providing succour to vehicle owners, whose vehicles were stolen or damaged due to an accident.
It is heartwarming to note that insurance companies in the country settled about 92.3 per cent of all vehicle reported claims in year 2022. Whilst available data from Nigerian Insurers Association (NIA) revealed that N18.98 billion was paid as motor insurance claims in 2020.
These actions taken by insurance practitioners, had helped many vehicle owners, who hitherto, would not have been able to replaced the affected vehicles, due to the soaring cost, have remained in the league of vehicle owners.
Motor Insurance Claims Payment in 2022
According to the National Insurance Commission (NAICOM), insights into the Non-life insurance segment showed that motor insurance, led with regards to claims settlement vis-a-vis gross claims settlement, which stood at 92.3 per cent, signifying a nine points improvement as against its prior position.
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.
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?
Claims Beneficiaries
Insurance Editor of NewsPage Media, Sola Alabadan, whose vehicle was involved in an accident and got fixed through insurance shared his experience with Inspenonline.
According to him, on August 9, 2022, he embarked on a journey with his vehicle, driving from Lagos to Ekiti State.
He noted that the journey was safe, until a Toyota Sienna vehicle with Registration number GGE970GB, suddenly hit his car from the back and pushed him under a trailer ahead of him.
Alabadan said, he escaped death by whiskers as the windscreen of his vehicle was shattered, while the bonnet and 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 not injured, he said tiny broken glasses splashed on his body, making him, 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.
Alabadan, who is an experienced insurance editor and understands the principles of insurance, enquired from the driver, if his vehicle has the minimum third party insurance cover required by the law and the driver replied yes.
To confirm the authenticity 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 fixed Alabadan’s vehicle.
The third party claims payment, enabled Alabadan to recover his vehicle.
Award-winning skit maker and public figure, Emmanuel Chukwuemeka Ejekiru,
popularly known by his stage name, Oga Sabinus, got an insurance claim worths N35,114,625.00 from Allianz Nigeria Limited to replace his damaged vehicle due to an accident.
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.
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 accident 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.
Insurance over the years, has remained one of the best tools to mitigate risks. This can be attested to by those who embraced the practice and people closed to them.
It is therefore, necessary for to imbibe the words of Nigerian Council of Registered Insurance Brokers (NCRIB), that ‘Whatever Worths Buying, Is Worths Insuring’. Therefore, insurance would remain the best way to keep valued treasures especially now that prices are not stable due to soaring inflation.
