Some motorists have protested against the new increase in third party car insurance price from N5000 to N15,000.
They all unanimously agreed that adding N10,000 to that would make them pay more premium.
The National Insurance Commission on Thursday raised insurance claims and costs for all classes of motor insurance, including motorcycles.
According to NAICOM, the third party insurance premium rate for drivers will now go from N15, 000 to N5,000.
NAICOM also increased motorist claims to N3m in the event of an accident.
Sunday PUNCH reports that buyers of comprehensive motor insurance will not pay less than five percent of the sum insured or the price of the vehicle after all rebates and discounts.
The new development was disclosed in a circular dated December 22, 2022, signed by the Director of Policy and Regulation Leonard Akah with number ‘NAICOM/DPR/CIR/46/2022’, which was circulated to all insurance companies on Friday.
The highest cost in the new tariffs, Sunday PUNCH reports, is N100,000 for commercial trucks / general transport, which also includes N5m claims to policyholders in the event of an accident.
Following the policy, automobile insurance premium income is expected to improve the profits of operators in the industry by 200 percent after adding N10, 000 to the third cheapest which is currently N5,000.
The effect of this on the industry is to improve premium income in business class from 2023 onwards.
Until recently, the car insurance class has been the main source of income for some insurers and this new development will increase their income, Sunday PUNCH reported.
According to business reports, the industry earned a total of N77.7 billion from motor insurance in the six month period from April to September 2022.
Business class earned N32.4bn between April and June and N45.3bn between July and September.
According to the circular, the commission stated that it had the power to approve new motor insurance rates under Section 7 of the NAICOM Act, 1997 and other existing laws, and stated that the new motor insurance rates would come into effect from January 1, 2023.
The commission warned that failure to comply with the circular will result in appropriate regulatory sanction.
For commercial vehicles, trucks / general transport have a claim limit of N5m, and the new premium is N100,000; The special types of insurance have a claim limit of N3 million, the new premium is N20,000, while tricycle owners will pay N5,000 for each insurance to enjoy claims of N2m.
For motorcycle insurance, the new premium is N3,000, and the claim limit is now N1m.
Reacting, a Lagos-based car owner, Olayinka Dada, said NAICOM was not realistic with the increase.
He stated that it would cause more pain to the drivers, because it would all fall on the “owners of the cars” to make these payments.
“When I heard the news, I knew that these people (NAICOM) were not realistic. Third party insurance is, as far as I know, one of the cheapest insurance coverages for a reason. Are they trying to make more money for the insurance companies by letting us ‘die’?
“How much do they expect to pay now for comprehensive motor insurance?” he said
Another Lagos-based car owner who also operates one of the e-hailing services, Mrs. Omo Olamide, said the new increase was “unfair” to car owners and other road users.
“The policy is unfair. If the way I understand it is that I am not going to pay N15000, a N10, 000 increase for something I was paying N5000 for, it cannot work. It’s unfair to us. It’s too high.
“I plead that the policy be revised to accommodate us. If you want to increase something like this, they should do it with a human face. The car I am using for this e-hailing service is insured and I know how much I am paying to my insurance providers. For now, the policy should be cancelled. , until all the involved parties are well taken,” he added.
However, the founder and CEO of the Center for Promotion of Private Enterprise, Dr. Muda Yusuf, said the increase was long overdue.
He said: “What can N5,000 buy today? The premium has been at N5,000 for so long.”
In addition, Mr. Johnson Chukwu, the Managing Director/CEO of Cowry Asset Management Limited, said, “The key thing that motorists here do not understand is why this increase was made and the true value of the insurance. there is compensation.