Some motorists have described the 300 percent increase in third party vehicle insurance premium, which comes into effect on 1st January 2023, as “unrealistic and unfair”.
While National Insurance Commission (NAICOM) jacked up the premium, it also increased claims for the insured by the same percentage. For instance, while a private vehicle will now pay a premium of N15,000 for Third Party Property Damage (TPPD) limit, the claim limit was increased from the present N1 million to N3 million.
Going by the new rate, premium for own goods will be N20,000 which comes with N5 million claim limit, while a staff bus is to pay N20,000 premium for N3 million claim limit.
NAICOM added that for comprehensive motor insurance policy, premium rate would not be less than five percent of the sum insured after all rebates and discounts.
In the new rate, the highest premium N100,000 for a commercial truck/general cartage, which also fetches the policy holders N5 million claims in the event of an accident.
A Lagos-based car owner, Olayinka Dada told Sunday PUNCH that NAICOM was being unrealistic with the increment.
“When I heard the news, I just knew that those people (NAICOM) were not realistic. Third-party insurance, as I know it, is one of the cheapest insurance covers for a reason. Are they trying to make more money for themselves by directing insurance firms to ‘kill’ us?
“How much do they now expect us to pay for a comprehensive motor insurance cover”? he said.
Another Lagos-based car owner, who also operates on one of the e-hailing services, Mrs Omo Olamide said that the increment was ‘unfair’ on car owners and other road users.
“The policy is unfair. If it is the way I understand it, that I will now be paying N15000, a N10,000 raise for something that I used to pay N5,000, it cannot work. It is unfair to us. It is too high.
“I am pleading that the policy is reviewed to suit us. If you want to increase something like this, they are supposed to do it with a human face. The car I am using for this e-hailing service is insured and I know how much I pay my insurance providers. The policy should be put on hold for now till all parties involved are well carried along”, she said.
However, the Founder and Chief Executive Officer of the Centre of the Promotion of Private Enterprise, Dr Muda Yusuf said the increment was long overdue.
He said: “What can N5,000 buy today? The premium has been at N5,000 for so long”.
Managing Director/Chief Executive Officer, Cowry Asset Management Limited, Mr Johnson Chukwu also said: “The key thing here that motorists do not seem to understand is why this increment was made and the true value of insurance. Insurance is there to indemnify one who has a premium to where they were before the loss occurred”.