Third-party vehicle insurance will cost N15,000 from January 1.
Holders of third-party insurance policies can now claim as much as N3 million if involved in an accident.
This is because the National Insurance Commission (NAICOM) has increased premium rate on all classes of motor insurance, including motorcycles with effect from January 1, 2023.
A circular titled, “New Premium Rates For Motor” signed by NAICOM’s Director, Policy and Regulation, Mr. Leo Akah, to all insurance institutions, announced the increment in insurance premiums and claims.
The country’s cheapest and the most popular class of insurance – the third-party policy – has been increased to N15,000 per annum from N5,000, a 200 per cent jump.
Holders of comprehensive motor insurance policies will be expected to pay not less “than five percent of the sum insured or the price of the vehicle after all rebates and discounts”.
The highest cost in the new rates is N100,000 for a commercial truck/general cartage which also fetches the policyholders N5 million claims in the event of an accident.
Motorists who fail to comply with the new premium rates have been promised “appropriate regulatory sanctions”.
NAICOM in the circular stated that the new rates on third-party insurance policies covers Ecowas Brown Card.
The approved rates include N20,000 premium for own goods motor insurance for which policy holders are entitled to collect N5 million claims in the event of an accident.
The new premium rate on a staff bus is N20,000 while the insured can collect N3 million claims in the case of an accident.
Commercial vehicles such as trucks/general cartage can now apply for N5 million claims limit for a new premium rate of N100,000; special types of insurance have a claims limit of N3 million after paying the new premium of N20,000.
Tricycles (keke NAPEP) owners will pay N5,000 insurance to enjoy N2 million claims while motorcycle insurance premium is now N3,000 with a claims limit of N1 million.
The implication of this new rates to the industry is that insurance companies will harvest more premium income from motor insurance business from 2023 going forward.
According to an insurance expert Badejo Ademuyiwa, “until recently, the motor insurance class has been the major earner of income for some insurance underwriters and this new development will swell their income”.
NAICOM, in its third quarter report said: “The insurance industry earned a total of N77.7 billion from motor insurance in a period of six months covering April to September 2022.
“The class of business fetched the industry N32.4 billion between April and June and another, N45.3 billion between July and September.”
With this development, premium income from motor insurance is expected to improve the earnings of the industry operators by 200 per cent following the addition of N10,000 to the cheapest third party which currently stands at N5,000.
