The National Insurance Commission (NAICOM) has increased the deductibles and premiums for all types of motor vehicle insurance, including motorbike insurance.
The third-party insurance premium cost for motorists would increase to N15,000 from N5,000 effective immediately, as reported by NAICOM.
Additionally, NAICOM increased the amount that motorists may claim in the case of an accident to N3 million.
Buyers of comprehensive auto insurance are required to pay no less than five per cent of the total insured or the price of the car, whichever is greater, after all, discounts and rebates have been applied.
This latest information was included in a circular that was sent to all insurance firms on Friday, with the number ‘NAICOM/DPR/CIR/46/2022’ and dated December 22, 2022. The circular was signed by Leonard Akah, who served as Director of Policy and Regulation.
In the new rates, the premium for a commercial truck or general cartage is the most expensive at N100,000; nevertheless, policyholders are entitled to claims worth N5 million if their vehicle is involved in an accident.
The impact of this finding for the industry is that beginning in the year 2023, the class of company will see increased premium revenue. This new trend will result in an increase in the income of those insurance underwriters who have relied heavily on the automobile insurance class as their primary source of revenue up until very recently.
During the period of six months beginning in April 2022 and ending in September 2022, the auto insurance sector contributed a total revenue of N77.7 billion to the industry. This segment of the market brought in N32.4 billion for the sector between the months of April and June, as well as N45.3 billion between the months of July and September.
Following the addition of N10,000 to the cheapest third party, which currently stands at N5,000, it is anticipated that premium income from motor insurance will improve the earnings of industry operators by a factor of 200. This comes as a result of the fact that it is expected that premium income will increase.
According to the circular, the commission stated that it was empowered to approve the new rates for motor insurance premiums by Section 7 of the NAICOM Act 1997 and other existing laws. The commission also stated that the new rates for motor insurance premiums would become effective on January 1, 2023.
It issues a warning that anyone who fails to comply with the circular will be subject to the applicable regulatory penalties.
In addition to approving a premium of N20,000 for own-goods motor insurance and stating that third-party insurance policies now include the Ecowas Brown Card as a standard benefit, NAICOM has also stated that policyholders will receive N5 million in compensation in the event of an accident. These new rates were published by NAICOM. As a result of the latest innovation, the annual premium for insuring a staff bus has been capped at N20,000, but the insured is eligible to receive claims of up to N3 million in the event of an accident.
When it comes to commercial vehicles, trucks and general cartage have a claims limit of N5 million while the new premium is N100,000; special types of insurance have a claims limit of N3 million while the new premium is N20,000, and owners of tricycles will pay N5,000 for insurance of each in order to enjoy N2 million in claims.
The new price for motorbike insurance is N3,000, and the maximum amount that may be claimed has been increased to N1 million.
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