In most countries, Third-party motor insurance is compulsory. This is due to the high possibility of accidents that can occur when driving. It serves as a protection bank when an accident occurs. The injured have free and easy access to health care, while the car owner has a financial claim for vehicle damages.
Any change to the policies of this insurance can extensively affect every motor insurance policyholder. As such, it is crucial to be informed of any modification to your motor insurance.
The National Insurance Commission of Nigeria (NAICOM), on the 22nd of December 2022, put out a circular stating an increase in Motor insurance in Nigeria. This increase and change will affect all vehicles in Nigeria, whether owned by private owners or corporate or commercial companies. It took effect from the 1st of January, 2023. Here are the changes and how they affect you as a motor insurance policyholder.
Third-Party Motor Insurance
Third-Party Motor Insurance covers accidental damage done to another’s vehicle or property. It also covers the third party’s medical bills where bodily injury is sustained.
Before the 1st of January 2023, Third party motor insurance premium was N5000 to claim 1 million Naira for private car owners. But there has been a 200% increase on all premiums(amount to be paid by you) for all vehicle owners.
As of now, these are the stipulated premiums on all vehicles and automobiles.
- Private car owners – N15,000 premium for a 3 million Naira claim.
- Owned goods vehicles – N20,000 premium for a 5 million Naira Claim.
- Staff Buses – N20,000 premium for a 3 million Naira Claim.
- Tricycles (Keke Napeps) – N5,000 premium for 1 million Naira claim.
- Special types – N20,000 premium for a 3 million Naira claim.
“Special types” are vehicles such as cranes or forklift trucks that aren’t easily spotted on the road but are used for unique commercial purposes.
Comprehensive motor Insurance
The premium for comprehensive motor insurance before the 1st of January 2023 was at least 2% of the vehicle’s value. As of now, a comprehensive motor insurance premium is at least 5% of the vehicle’s value to be insured.
The increase has caused an uproar among consumers and various organizations, including the Insurance Consumers Association of Nigeria (INSCAN).
An argument also arose that Nigerians were given a period of 1 week to adjust to the unexpected change and notification.
The current consideration for every policyholder/consumer will be how the increase in motor insurance benefits the insured/consumers; you. The National Insurance Commission states certain benefits and how they affect you.
Benefits of the increase in motor insurance premium in Nigeria: NAICOM
- Upgrade of the Ecowas Brown Card for third-party insurance
What is an Ecowas Brown Card?
An Ecowas Brown Card allows for free movement for West African international motorists that commute within the country/West African countries. It provides a full guarantee of fair and immediate compensation for vehicle owners when an accident occurs. Every Nigerian is exempted from the stress of getting a brown card after payment of insurance. As the card owner, you will be treated like you got your insurance done in that country.
The brown card has been captured in the upgraded third-party insurance premium. This will relieve the policyholder from the stress of accessing the brown card separately.
The brown card is recognized by government authorities, exempting the policyholder from any other formalities relating to a guarantee against civil liability risks.
2. Limitless life cover for accident victims
NAICOM’s head of Corporate Communications and Market Development, Mr Rasaaq Salami, held that the 3 million naira claim for damages for private owner car holders will
- Provide an increase to the amount of claim they can get for damages. This increase is from 1 million Naira to 3 million Naira.
- Provide limitless life cover for accident victims.
Although Naicom holds that the new rate was necessary due to the high cost of fixing damaged vehicles, fingers are still crossed in anticipation of a change in the recent policy.
To learn more about the insurance you need to enjoy a year with no stress, read here.