As motorists are gradually adjusting to the N15,000 new third party motor insurance policy rate, they are charging insurance companies to make the claims payment process simpler so that they can benefit immensely from it.
This is even as they called for increased awareness on the benefits of the policy to motorists and most of them are unaware of its benefits but keeps renewing it to avoid the wrath of law enforcement agencies.
The third party motor insurance policy has been hiked from N5,000 to N15,000, which also leads to N3 million maximum claims limit from the earlier N1 million for third party damage.
Third party motor insurance policy is the minimum insurance cover, allowed by law, for any vehicle that wants to ply Nigerian roads.
Speaking in exclusive interviews with LEADERSHIP, the motorists appreciated the fact that the Third Party Property Damage(TPPD) on private vehicles is now N3 million and N1 million for motorcycles, but want insurers to simplify the process of claims so that vehicle owners can get value for the premium paid.
On his part, a private car owner, Sunday Wusu said, he is aware of the third-party insurance policy but has never had reason to ask for a claim before because he has never had an accident, saying he is going to renew his expired policy by paying N15,000 premium. Mine has expired and I am going for renewal as I speak, though the policy price has gone up to N15,000, he said.
Another motorist, Ogunleye Nureni said, he and his colleagues were just paying annual premium, and has never asked for claim because they were not involved in any accident, saying, there should be a form of discount or give-back to accident-free motorists who consistently renew their insurance every time it expires, despite not recording any road mishap.
To him, “we are just paying for third-party insurance in this country without any benefit. Most of us do that to avoid any issue with law enforcement agencies, either police or Vehicle Inspection Officers (VIO), but we do not know its benefit. Since the policy can cater for up to N3 million maximum claim limit, then, I think most of us are missing out because we cannot go through the process it involves to get claims. We want to avoid delays and do everything to settle the matter at the scene of the accident and return to work. But if underwriters can simplify the process, then, we can see the benefits of our premium.”
Another motorist, Sunday Samuel, who operates at Ikeja bus terminal, is conversant with vehicle insurance but does not go for the third-party policy.
“I go for a comprehensive policy that can cater for my vehicle. Most of us here do not use the third-party policy. What do we want to do with it, with the kind of vehicle we use for transport?. However, I appreciate the insurance policy because it gives me confidence to drive on Nigerian roads, knowing that my insurance is there to cover me in the event of a road mishap,” he pointed out.
A transporter in Lagos, Awanu Mevo, on his part, said he had never benefited from any claims before as a third-party insurance policyholder as he believes it is not easy to claim.
“I am a Nigerian, and I know how it is in Nigeria. You need to know somebody in the system that you can call upon or else you have nothing to claim if the need arises,” he said.
He further stressed that he had a car that was involved in an accident before. To him, “I never bother to call my insurance firm because there is no hope. I am doing the insurance just to avoid the police ‘wahala’ (problem). Anything called insurance in Nigeria if you do not know somebody at the top, then, nobody will help you out. So, I do not bother myself. It can work in other countries but here in Nigeria, third-party insurance? forget about it, it is not working.”
Another transporter, Tony Okorie stated that, over 90 per cent of vehicle owners or drivers do not know that third-party motor insurance covers them in case of an accident as he believes getting claims for third-party insurance is difficult because it is not comprehensive. He advised insurance firms to increase awareness and should always be prompt in payment of genuine claims.
“They should also keep to their word by compensating the policyholder when they call for it. There should not be any ambiguity or hiding clauses that may hinder the policyholder from getting claims when the person suffers a loss or when the need arises. I think this is one reason many do not take it seriously.
“Let there be open and unambiguity about the policy, then, vehicle owners can keep in mind that when an accident occurs, they have insurance that will take care of the loss,” he pointed out.
In December, 2022, the National Insurance Commission (NAICOM) had issued a circular reviewing rates for Motor Insurance effective January 1, 2023, hence, raising the rate by 200 per cent from N5,000 to N15,000, attributing the new rates to hike in inflation rate, even though, the existing rate has being in use for about 19 years.
Initially, when the policy was being sold at N5,000, the maximum claims limit was N1 million, however, with 200 percentage increase in premium, it also shoot up the claims limit for vehicle to N3 million, translating to N2 million growth, while it is even N5 million maximum claims for goods vehicles and staff buses.
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