The pride of the insurance industry in Nigeria at the moment is that its third-party insurance policy is no more ‘Police let me pass’ but a policy to boast of, NGOZI ONYEAKUSI Reports

Third Party motor insurance is a policy that covers accidental damage caused by one’s vehicle to another person’s vehicle or property. It also covers the third party’s medical expenses, if any bodily injury is sustained.

The policy is presently a prime reason to reckon with the insurance industry. The industry looks forward to transform its business into the toast of consumers as has been the vision of stakeholders who strongly believe the policy will promote insurance penetration as well enhance sector’s contribution to GDP.

Before now most car owners merely pay N5,000 premium for third-party motor insurance policy simply because they are mandated by the law to do so. Moreover, to avoid being disturbed by the police.

But today the story has changed as motorists now enjoy benefits to the tune of N3million just for paying N15,000.

This is because the recent National Insurance Commission (NAICOM)’s upward review of the rate from N5,000 to N15,000 has authomatcally and significantly increased the maximum claims limit that is the Third-Party Property Damage(TPPD) for motorists by 200 per cent, from N1million to N3 million.

Meaning that at event of an accident, the new rate offers a third party vehicle’s owner right to claim up to N3million to repair damage done to his vehicle or property.

NAICOM had January 1, 2023, raised the rate for third-party motor insurance by 200 per cent from N5,000 to N15,000.

To this end, NAICOM said, the TPPD, which is the limit of claims an insured can enjoy on the policy, TPPD on private  vehicle is now N3 million; Goods vehicle and staff bus goes for N5 million, even as trucks/general cartage will now have maximum Claims limit of N3 million, adding that, the special types is N5 million; tricycle N3 million and N1 million for motorcycle.

Meanwhile, NAICOM said: “the new motor insurance premium rate increase third party motor insurance to N15, 000 for private, while commercial is N20, 000. Goods and staff busses are to pay N20,000 while truck pays N100,000 even as tricycle has been mandated to pay N5,000 and motorcycle goes for N3,000

The very good thing about the new rate is that the thirtd-party motor insurance benefits have been enlarged, and its coverage is now wide, offering unlimited payment of medical bills and rendering financial support to beneficiary in case of loss of life when accident occurs.

It does not end there, with the new rate motorists can now drive within West African region without fear of insurance cover.

This is because the new rate guarantees motorists plying within the ECOWAS region the benefits of third party liability protection under the ECOWAS Brown Card Scheme. This is automatically obtained on procuring the new third party policy.
The main objective of the scheme is to guarantee to the victims of road accident a prompt and fair compensation of damages caused by non resident motorist from ECOWAS member states visiting their territory.

According to the Managing Director Tangerine General Insurance, Mr Mayuwa Adeduro;
“One major thing about third-party insurance is that the coverage has been enlarged.
Now you drive within West African region without fear of cover and limit of liability in Francophone countries is higher than in Anglophone countries in terms of third-party liability and others.

So all these have taken the pains off you. And the third party aspect of the motor, for the N15,000 you have N3million property damage in it, unlike before N1million . What is N1million?, What can N1million buy?. Now you have N3million in terms of property damage, accident, injury, death, these unlimited provided that a family that this person a car has knocked down is a family man that is taking care of many children or gaining so so salary .

The benefits can run into hundreds or millions so it was right”, he said.

He noted that the commission came to insurance industry’s rescue at the appropriate time.

“It is as bad as that some organisations can no longer pay claims, can no longer sustain their operations. So NAICOM has even come to use regulatory power to pronounce what the industry has implemented.

Adeduro pointed out that if not for the review some insurance firms will have collapse. “Otherwise firms will go down because averagely now five years ago, Toyota Land Cruiser or Prado was about N30million or so but today it goes for N80million and people are charging two per cent, even some less than two per cent.

That cannot buy a headlamp of that car, so to me , I am not speaking for the industry. I want to appreciate NAICOM. I have started seeing the impacts in our books since January. People are are complying because people knows that the cost of replacement of that car is even more than that” he said.

Similarly, the National Vice President, Association of Registered Insurance Agents of Nigeria (ARIAN), Kehinde Jegede, sees the introduction of new premium for auto insurance as a development that would aid better service and improvement of claim settlement for motor insurance policyholders.

He noted that, with the new rate and NAICOM’s monitoring, all the stakeholders shall have fair sharing, adding that, motorists with genuine policy shall have access to timely indemnity, as confident of the public on insurance will be reassured.

The present premium regime, he said, does give room for better service, while members of the public shall be better served with the new introduction of premium rates and regulations.

A Lagos-based private vehicle owner, Mr. Busari Basiru Ismaila, when told about the maximum claims limit of the current third party rate regime, said, if that is so, and insurance companies can live up to expectation on this promise of N3million property damage limit, then, its a good policy, given the erratic driving on Lagos roads.

He said, it makes business sense for motorist to pay N15,000 for a policy knowingful well that he will be compensated to the tune of N3 million, urging insurance companies to improve in the area of paying genuine claims as they are always fond of giving excuses in order to avoid claims payment.

Then what we will try again because it equally the fact that the benefits have been enlarged.