VEHICLE owners are now entitled to higher claims payment in the event of accident, third party damage liabilities, and loss of vehicle following the review of the premium rate for motor insurance in Nigeria.
The National Insurance Commission (NAICOM), in partnership with insurance companies under the new dispensation of increased benefits, want insured vehicles to get adequate compensation to meet their liabilities, especially in this era of high inflation and forex shortage that have pushed up the cost of living.
This has been made possible through the NAICOM, which, in December 2022, reviewed upwards the premium rate for motor insurance in Nigeria, effective January 1, 2023.
Under the new dispensation, private vehicles that used to pay N5,000 premium for N1 million Third Party Property Damage (TPPD) limit, are now to pay N15,000 premium for N3 million TPPD, while owner of good vehicles are to pay N20, 000 premium for N5 million claims limit, and staff buses are to pay N20,000 premium for N3 million claims limit.
This was contained in a circular issued on December 22, 2022 and signed by Leonard Akah, Director, Policy and Regulation at NAICOM on behalf of the Commissioner for Insurance, and sent to all insurance companies.
The circular reads: “pursuant to the exercise of its function of approving rates of insurance premium under Section 7 of NAICOM Act 1997 and other extant laws, the commission hereby issues this circular on the new Motor Insurance Premium rates effective from 1st January 2023.”
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, while for comprehensive motor insurance policy, premium rate shall not be less than five percent of the sum insured after all rebates and discount.
Apart from this, the review also offers motorists plying the ECOWAS Region the benefits of third party liability protection under the ECOWAS Brown Card Scheme, which provides motorist complete guarantee for a prompt, fair and immediate compensation for any accident that may occur outside his habitual residence country.
The NAICOM explained that ECOWAS Brown card used by motorists plying within West Africa sub-region had been captured in the revised premium for third party motor insurance.
This implies that a registered Nigerian vehicle with third-party motor insurance automatically purchased ECOWAS brown card and is covered when in and around any of the West African countries, while motorists from other West African countries in Nigeria will get third party compensation in event of accident with a Nigerian vehicle.
The premium increase by the NAICOM came after 19 years as the last time the country had an increase in premium for third party motor insurance was in 2004.
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