The recent increase in motor insurance premium in Nigeria has jolted many motorists and other vehicle owners into paying attention to their rights and benefits.
Some policyholders told BusinessDay that they would no longer take for granted their claims on their contract with insurance companies after they have been compelled to pay the new premium on motor business, which became effective January 1, 2023.
The National Insurance Commission (NAICOM), the regulator of the industry, on December 22, 2022, announced in a circular the new premiums for motor insurance in the country.
According to NAICOM, private vehicles that were paying N5,000 premium for N1 million third party property damage (TPPD) limit, are to pay N15,000 premium for N3 million TPPD, while owner good vehicles are to pay N20,000 premium for N5 million compensation limit, and staff buses are to pay N20,000 premium for N3 million.
Commercial trucks and general cartage are to pay N100,000 premium for N5 million TPPD limit; tricycles N5,000 for N2 million TPPD limit, and motorcycles, N3, 000 for N1 million TPPD limit.
For comprehensive motor insurance policy, it said premium will not be less than five percent of the sum insured after all rebates and discounts.
The commission said failure to comply with the circular shall attract appropriate regulatory sanctions.
John Akinukawe, a commercial bus driver who uses Toyota Sienna for interstate travels, said he paid the new premium for his vehicle in February.
Akinukawe said: “The new rate is quite high but considering the prices of motor parts and cost of replacement in the event of accident or total loss, it is justifiable.
“I will no longer take my claims for granted. Any time I have an accident caused by either me or someone else, I have to take it to my insurer. They have to pay.”
He, however, urged insurers to rise up to their responsibility by ensuring that the process of documentation is seamless and easy for customers.
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Isaac Solomon, a customer of one of the insurance companies, said he has paid his premium for the year, but said it was “a pain too hard to bear”.
He said he had to pay N125,000 on his 2006 Toyota Camry as against the N54,000 he was paying before the increase in premium
“I take comprehensive cover for my car because for me, the third party cover alone does not give me the comfort I desire because I can control my driving, but what about other people? In fact, some people drive recklessly and you have to be careful of them,” he said.
Solomon said he had made claims of about N500,000 in the past when he had an accident, and wondered what would have been the case if what he had was just third-party motor policy.
He said his insurance company offered him the option to pay a monthly or quarterly premium to ensure that the pressure of the new rate was manageable.
Solomon said he has no regrets insuring his car because he usually got his claims promptly.
Another motor insurance policyholder who identified himself simply as Joshua said he had paid the new premium.
“Maybe we will start to take insurance more seriously because the premium is high, and so we will no longer leave the money (claims) for the insurance companies,” he said.
