• Monday, February 26, 2024
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Fake motor insurance comes with these risks

Motorists shun insurance as economic hardship bites

You have taken out an insurance policy for your vehicle and convinced within you that in the event of an accident resulting from your own mistake, your insurance company will compensate for third-party damage or loss.

You had left for work one Monday morning and hoped for a good day, but unfortunately while navigating the traffic in Lagos, your Toyota Highlander SUV ran into a Mitsubishi Salon car belong to one of the State’s Ministries.

With confidence that you have a third party vehicle insurance that qualifies you to fall back on your insurance company to meet claims obligation for such damage, you proudly walked out of your vehicle and told the driver of the Mitsubishi not to worry that you have insurance.

The Mitsubishi driver was happy because he knows insurance pays claims when it happen, so he requested that you call your insurance company to take note of the incident before he would accept your paper document for further actions.

While the argument was going on, team of traffic monitoring police pulled over the accident scene because it was already causing traffic, and requested that the vehicle papers of the highlander be verified.

On inputting the details in the Nigerian Insurance Industry Data Base (NIID), it was discovered the vehicle certificate is fake and non-existent.

On probing further, it was discovered that the Highlander SUV Insurance papers were obtained from vehicle licensing office, and not from any genuine insurance company that is licensed by the National Insurance Commission (NAICOM).

At this time, it was concluded that the insurance papers he was parading was fake and cannot meet any claims obligation, in fact, it belongs to a defunct insurance company. This is what people face most times when they obtain their insurance covers from the wrong place, and it is common at licensing offices.

At this point, the owner of the Toyota Highlander is embarrassed and has committed offence that is liable for serious fines or even imprisonment.

1. Fine

When you use a fake insurance policy in Lagos and Ogun State for instance, you’ll be fined between N20,000 to N30,000 for each year you did not renew your insurance genuinely.

These States are also upping fines across the board because of the rise in uninsured drivers and fake policies.

2. You Cover The Damage

Any money you saved by using a fake insurance that cost less will be spent when there is an accident because you will not be able to summit claims to a non-existent insurance company.

Driving with a fake insurance automatically means when an accident occurs whether minor or serious, and you are at fault, you’ll have to pay those costs out of your pocket, since you don’t have a genuine insurance policy to cover your expenses.

God help you, if the accident is serious, you are expected to cover the medical bills, repair your car and that of the third party involved in the accident that would have been paid for by your genuine insurance company.

Ask yourself—if you were involved in an accident and you are at fault, would you be able to pay for motor accident damage between N500,000 to N1million especially with current high inflation and rising prices of spare parts.?

3. Risk Arrest By Law Enforcement Agency

With the help of Nigerian Insurance Industry Data- base (NIID), introduced by Nigerian Insurers Association, ( NIA), law enforcement officers such as Nigerian Police, Vehicle inspection Officers (VIO), Federal Road Safety Corp.( FRSC), can easily verify the genuineness of the insurance certificates you are caring.

The policyholders whose vehicle insurance details had been uploaded on the NIID can check their motor insurance policy status by visiting www.askniid.org or by sending Short Messaging Service (SMS) to the USSD code *565*11# on any mobile phone with or without internet access.

How much is genuine third party motor insurance

According to the National Insurance Commission, Naicom, the commencement date for the new rate for third party motor insurance premium was January 1, 2023.

With the new rate, third Party insurance cover for motorists is now N15,000 yearly as against N5,000 paid before the above date.

Third Party Property Damage which is the limit of claims an insured vehicle can enjoy on a policy for private vehicle will now be N3 million for the new premium of N15,000.

Own goods third party premium is N20,000 with N5 million compensation; Staff bus attracted N20,000 premium with N3 million compensation; Commercial (trucks, general cartage) N100,000 premium with N5 million compensation; Special types attracted N20,000 premium with N3 million compensation; Tricycle attracted N5,000 with N2 million compensation; Motorcycle N3,000 premium with N1m compensation.

Benefits of Genuine Third Party Motor Insurance Cover

In Nigeria, third party motor insurance is mandatory by law for all drivers. This is aimed at providing adequate compensation to third party road users.

Third-Party Vehicle Insurance protects you from unplanned financial exposures. Even if you are at fault with your genuine third party insurance cover the insurance company bears the risk.