Starting from next year, motorists who want to renew their insurance certificate or procure a fresh one will have to pay N15,000 as the new premium, LEADERSHIP learnt.
However, commercial vehicles will have to pay N20,000 for third party vehicle insurance paper.
The new rate amount to about 300 per cent increase from N5,000 that was earlier being charged.
A circular from the National Insurance Commission (NAICOM) sighted by our correspondent on Saturday, attributed the new rates to hike in inflation rate, even though, the existing rate has being in use for about 19 years.
The circular titled: ‘The New Premium Rate for Motor Insurance’ with reference number NAICOM/DPR/CIR/46/2022 signed by the director, Policy & Regulations, Mr Leo Akah, disclosed that, “in pursuant to its function of approving premium rate of insurance companies under Section 7 of NAICOM Act 1997, and other extant laws, the Commission hereby issue this circular on the new motor insurance premium rate effective from January 1, 2023.
“The new motor insurance premium rate increase third party motor insurance to N15, 000 for private, while commercial is N20, 000. Goods and staff buses are to pay N20,000 while truck pays N100,000 even as tricycle has been mandated to pay N5,000 and motorcycle goes for N3,000.”
Similarly, with the premium increase, the Sum Assured has equally increased from the usual N1 million to N3million and above, depending on the classes of automobile.
The regulatory body said, the Third Party Property Damage(TPPD), which is the limit of claims an insured can enjoy on the policy, noted that, Sum Assured on private vehicle is N3 million; Goods vehicle and staff bus go for N5 million, even as trucks/general cartage will now be assured at N3 million, adding that, special types is N5 million; tricycle N3 million and Sum assured for motorcycle is N1milion.
Moreover, NAICOM said, Comprehensive insurance motor insurance premium rate shall not be less than 5 per cent of the sum insured after all rebates/ discounts.
Stressing that failure to comply with the circular will invite the wrath of the commission, it added that, “failure to comply with this circular shall attract appropriate regulatory sanction”
The new rate is expected to become effective by January 1, 2023.
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