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Chuks Udo Okonta
While motorists comply with Police enforcement of third party motor insurance, they should note that buying the policy guarantees them access to claims payment, which insurance companies would only settle those considered genuine.
Insurance companies are committed to payment of genuine claims, having paid 92.3 per cent of reported motor insurance claims in third quarter of year 2024.
Prior to the enforcement, many motorists have been carrying fake policy documents obtained from quacks at motor licensing offices.
For motorists to effective enjoy coverage on their vehicles they should get genuine policies and avoid bad claims.
What constitutes bad third party motor claims?
In third-party motor insurance, a “bad claim” is refered to a claim that is invalid, fraudulent, or not covered under the policy. Here are some common reasons why a third-party motor insurance claim might be considered “bad”:
*Fraudulent claims: Exaggerated or fabricated claims, such as staged accidents or inflated damage estimates.
*Lack of coverage: The policy does not cover the type of damage or loss claimed (e.g., mechanical breakdown, wear and tear).
*Policy exclusions: The claim falls under a policy exclusion, such as driving under the influence, reckless driving, or using the vehicle for unauthorized purposes.
*Insufficient documentation: Inadequate or missing documentation, such as police reports, witness statements, or repair estimates.
*Late notification: The insured fails to notify the insurer within the required timeframe, which can be a condition precedent to liability.
*Contributory negligence: The insured’s actions or omissions contributed to the accident or damage, which may reduce or eliminate liability.
*Uninsured or unlicensed drivers: The driver was uninsured, unlicensed, or did not have the necessary permits.
*Vehicle modifications: Unauthorized vehicle modifications that increase the risk of accident or damage.
*Misrepresentation: The insured provided false or misleading information when purchasing the policy or submitting the claim.
*Criminal activity: The accident or damage was caused by or related to criminal activity, such as theft, vandalism, or terrorism.
Insurers have a duty to investigate and verify claims to ensure they are legitimate and meet policy requirements. If a claim is deemed “bad,” the insurer may deny or reduce the claim, and in some cases, may even cancel the policy.
According to the National Insurance Commission (NAICOM) insurance companies paid 92.3 per cent of reported motor insurance claims as at third quarter of 2024.
NAICOM had stated in the Synopsis of the Insurance Market in Third Quarter 2024, that the improvements in claims management of the industry has served as driver for expansion in
gross claims reported in Q3 2024, reaching N564.1 billion which is representative of about 48.1
per cent of the total premiums generated during the period.
NAICOM said Life Insurance segment
recorded an impressive claims settlement ratio of 81.6 per cent, while the Non-Life segment achieved
73.6 per cent.
It noted that the ratio of net claims paid demonstrated strong performance across various business classes, adding that
motor insurance achieved an outstanding ratio of 92.3 per cent; followed by miscellaneous at 88.9 per cent; general accident and fire businesses recorded 86.3 per cent and 75.1 per cent respectively.
It said the oil & gas
business, while lower at 63.7 per cent, showed significant progress compared to 43.1 per cent recorded in the
corresponding period of the previous year.
It submitted that the industry in quarter under review recorded a N3.88 trillion in total assets representing an expansion of 5.1 per cent
compared to the corresponding period when it reported N2.81 trillion as the industry size.
The insurance sector regulator maintained that the
statistics of the financial position of the market also recorded a total of N2.34 trillion in assets
as attributable to Non-Life business, while the Life business accounted for N1.54 trillion.
NAICOM stressed that the sector showed resilience amid macroeconomic
challenges, sustaining the industry growth trajectory at 60.9 per cent, year on year, and 44.3
per cent on a quarter-on-quarter basis, to close at about N1.17 trillion in gross premium
written.
“The Gross premium written in the third quarter of 2024 stood at N1.17 trillion a remarkable
occasion attributable to the consistent deepening policy of the Commission and market
resilience.
“The performance was majorly led by the non-life sector, recording a market share
of 68.9 per cent for a total volume of N808.4billion while the life segment accounted for 31.1
per cent of the market premium aggregate,” it posited.
