There are signs that 8.9 million of the 12 million automobiles on Nigerian roads are being driven across the nation with bogus insurance policies.
The Guardian’s research revealed that just roughly 3,013,205 Third Party Motor policies are currently in effect, leaving 8,986,795 million drivers in the nation who are driving with forged, expired, or non-insurance documents.
Stakeholders in the insurance business have continued to express serious worry about this trend.
Commercial vehicles were charged N7,500 for Third Party Motor Insurance in 2022, whilst the price for private saloons and SUVs was fixed at N5,000. The Guardian investigations then discovered that the majority of drivers opted for phony insurance documents in some situations.
This was due to the fact that it cost between N2,000 and N3,000 less. As law enforcement officials have little to no awareness of the advantages of purchasing initial insurance coverage, they also did this to escape their fury.
After months of rumors, the National Insurance Commission (NAICOM) reassessed the rate at the beginning of 2023 and increased it by 200%, from N5,000 to N15,000.
Then, each subscriber might seek compensation for harm done to a third party up to N3 million. Recall that the maximum claims amount was N1 million when the certificate cost N5,000.
According to Section 68 of the Insurance Act of 2003, “no person shall use or cause any other person to use a motor vehicle on the road unless a liability, which he may thereby incur in respect of the damage to the property of third parties is insured with an insurer registered under its act. The policy states that the law shall cover the liability of not less than one million and that a person that contravenes the provisions of that section of the law commits an offence and will be liable on conviction to a fine of N250, 000 or imprisoned for one year.”
The Director-General of the Nigeria Insurers Association (NIA), Mrs. Yetunde Ilori, commented on this development in the industry and noted that vehicles registered on the Nigerian Insurance Industry Database (NIID) are those with legitimate insurance papers, noting that those drivers with fake papers are either driving without insurance or flaunting fake insurance certificates.
Ilori urged car owners to use the aforementioned USSD code *565*11#code to verify the legitimacy of their insurance coverage, warning drivers with bogus vehicle certificates not to expect claims when an accident occurs in contrast to those with legitimate insurance certificates.
She claimed that this was the cause of several Nigerians’ complaints about insurance firms not honoring claims.
This, she claims, occurred because they lacked legitimate insurance coverage “as you can see in some licensing offices where you buy third-party motor insurance at the rate of N2,000.”
Regarding this development, Rotimi Edu, president of the Nigerian Council of Registered Insurance Brokers (NCRIB), expressed his displeasure at an event in Lagos called “Evening with Brokers” that some motorists have chosen to use fictitious insurers to the detriment of the registered insurance firms while some are uninsured, making the insurance industry more difficult to operate.
He urged the public to purchase insurance through brokers because they have the necessary knowledge to advise customers on the right policies that best suit their needs. He also urged relevant stakeholders to raise insurance awareness to help some of these motorists and other Nigerians understand the benefits of insurance.
Jumoke Odunlami, Chief Customer and Marketing Officer, AXA Mansard Insurance, urged government and law enforcement agencies to support insurers by enforcing the procurement of compulsory insurances at an event to launch Awoof Xtra promo for 3rd Party Motor Insurance policy. She added that operators cannot be selling products and at the same time be enforcing insurance requirements.
Road users would not want to put their automobiles on the roads without valid cover, according to Odunlami, provided there was sufficient enforcement and the appropriate punishments were meted out to the violators.
