Reports from the Federal Inland Revenue Service (FIRS) indicating that there are over 11,000,000 vehicles registered in Nigeria show that the insurance industry is capable of generating over N55 billion annually from just a minimum third party cover of N5,000.00 per vehicle.
Also, Lagos State which is reported to have about 20 percent of the vehicles registered in the country, equal to 2,200,000 could generate N11billion for the insurance industry on minimum third party cover.
Motor Third Party Insurance is a cover made compulsory under the 2003 Insurance Act, for all vehicles plying Nigerian roads, against third party damage or loss. The policy which sells for N5, 000 for cars and N7, 000 for trucks, provides cover for third party damage up to N1 million for property and no limit to life.
Incidentally, the potential of this policy has not been efficiently tapped by the nation’s insurance industry due to the high incidence of fake motor insurance certificates.
This however accounts for why insurance companies still generate far less than this annually, despite a combination of efforts by stakeholders.
As at the end of 2012 financial year, the insurance industry generated about N44.65 billion premium out of N217 billion gross premium generated in 2011.
This represents the total premium income from both comprehensive motor insurance and third party motor insurance during that year.
While the industry has continued to tinker with ideas to check premium loss to fake motor insurance certificate, which are prevalent in the vehicle licensing offices nationwide, it has been discovered that the insuring public still do not know how to avoid patronising fake operators.
Bola Omole, manager, IT Nigerian, Insurers Association, said the industry has instituted the Nigerian Insurance Industry Database (NIID) to help the public discern between fake and genuine insurance cover.
“Except you want to be deceived or you want some people to feed fat on your ignorance, you have got no reason to pay for fake documents in the name of motor third party insurance.
“So, now if your policy document is not captured in the Nigerian Insurance Industry Database (NIID), then that policy document is fake and worth nothing.
“You can actually verify it yourself, right away from where you are. This has not only brought a check to fake documents, it has now empowered you to make claims on all third party liabilities”.
How do you verify the document? Simply apply this code into your GSM handset, and in seconds the status of your cover is displayed on your screen. (SMS: policy number*plate number to 33125).This is compliant with all networks, Omole said.
According to her, if the resultant message says, “not available on NIID date base, then know that what you are parading as insurance is fake. But if it’s there, it tells you immediately the name in which your vehicle is registered; the make and model of the vehicle; the colour of the vehicle; name of the insurance company and date of expiration of the policy.
“Verifying the authenticity of your vehicle insurance policy on the NIID gives you peace of mind and assurance that your claim will be paid”, says Sunday Thomas, director general, Nigerian Insurers Association.
Also important is the source from where you buy your insurance. If you do not buy from any of the 42 general business insurance companies registered and licensed by the National Insurance Commission (NAICOM), it is possible that you buy a fake document in the name of insurance. So, vehicle licensing offices are not insurance companies’ office and touts are there with fake documents to sell to you and this denies you the right to make claims when there is liability.
By: Modestus Anaesoronye
