Of the 12million registered vehicles on Nigerian roads only 2.36million have genuine motor insurance certificates, leaving about 9.64million vehicles uninsured as at July this year, LEADERSHIP checks have revealed.
A data sourced from the Nigerian Insurers Association (NIA) shows that there are currently 12million registered vehicles on roads across the country with five million of the cars residing in Lagos State.
The 2.36 million vehicles that are insured have all been registered on the Nigerian Insurance Industry Database (NIID) by their respective insurers.
Investigations showed that some of these 9.64million vehicles parade fake motor insurance papers, while some do not have any insurance coverage even as few who had genuine insurance papers before have failed to renew when their previous Motor insurance cover expired.
The Federal Roads Safety Corps (FRSC) Act demands that any automobile on Nigerian roads must have at least third party motor insurance policy or comprehensive insurance coverage which goes for 10 per cent of the value of a vehicle.
Third Party Vehicle Insurance comes at a fixed price of N5,000 for privately used saloons and SUVs, while commercially used vehicles are charged N7, 500.
To this effect, the insurance industry is losing about N48 billion to non-insurance of these vehicles, assuming the 9.64 million vehicles purchase third party motor insurance, which is the minimum cover to have before driving a vehicle on Nigerian roads.
Findings revealed that most drivers go for fake insurance because it is cheap as well as to avoid the wrath of the law enforcement agents, as they have little or no knowledge of the benefits of buying original insurance cover.
Other uninsured motorists, it was learnt, prefer to bribe their way out with law enforcement agents should they meet them on the road.
Speaking exclusively with LEADERSHIP, Actuarial Scientist and managing director, Achor Actuarial Services Limited, Mr Pius Apere, said it was pathetic that motorists can put their vehicles on the roads without appropriate insurance cover, despite the fact that law enforcement agencies such as FRSC, Vehicle Inspection Officers (VIOs) and the police are always checking for vehicle documents.
While calling for prosecution of offenders to serve as deterrent to others, he urged law enforcement officers to specifically ask for insurance certificate of motorists to increase insurance patronage.
He said although some of the uninsured vehicles have fake insurance papers, majority of them, especially commercial vehicle operators, do not have appropriate insurance coverage, even as he accused government at the federal, state and local levels of failure to insure virtually all the vehicles in their coffers.
He noted: “Insurance industry is losing a lot to non-insurance of all these vehicles, despite the fact that motor insurance is even one of the six compulsory ones.
“Imagine if all these 9.64 million vehicles are insured even with third party cover, which is N5,000, that amounts to over N45 billion, it’s a lot of premium income to the insurance industry. The problem with Nigeria is not about law, but implementation.”
The executive secretary/CEO, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr Fatai Adegbenro, was embittered that despite the increased rate of accidents on the roads, most vehicle owners still have the confidence to evade insurance.
“It often baffles me when I see two enlightened persons fighting themselves on the roads during a crash, when what they could have done is to exchange their respective third party motor insurance, that is, if they have one, to get their cars fixed. Third party covers repair to the tune of N1 million when in actual sense, you paid N5,000 premium,” he pointed out.
Insurance companies as risk buyer, he said, will always return back the insured to the financial position he was, prior to the occurrence of the insurable risks, urging people to utilise the tool of insurance to replace their assets.
Meanwhile, the executive director, Anchor Insurance Company Limited, Mr Adebisi Ikuomola, while speaking at a conference in Lagos, recently urged government and law enforcement agencies to support insurers by enforcing the procurement of compulsory insurances, adding that operators cannot enforce insurance laws.
He believes if there is proper enforcement and the right sanctions meted on the violators, road users would not want to put their cars on the roads without valid cover.
He added that with enforcement, the insurance industry will not only get more premium income, but would also increase the contribution of the insurance industry to the nation’s Gross Domestic Product (GDP).