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Home Sectors Financial Services

NAICOM increases third party motor insurance by 200% to N15,000

Says new policy takes effect from January 2023

Zainab Iwayemi by Zainab Iwayemi
December 24, 2022
in Financial Services, Sectors
NAICOM increases third party motor insurance by 200% to N15,000
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Nigeria’s insurance regulator, the National Insurance Commission (NAICOM), has raised third-party insurance coverage for motorists from N5,000 to N15,000 yearly.

According to a circular addressed to insurance companies, as seen by Nairametrics, the new policy becomes effective from January 2023

Third-Party Property Damage: Part of the circular which was signed by NAICOM’s Director of Policy and Regulation, Mr Leo Akah, said: 

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  • “Pursuant to the exercise of its function of approving rates of insurance premium under Section 7 of NAICOM Act 1997 and other extant laws, the Commission hereby issues this circular on the new motor insurance premium rates effective from Jan. 1, 2023.”

The circular added that for any third-party property damage (TPPD), the limit of claims an insured can enjoy on a policy for the private vehicle will now be N3 million for the new premium of N15,000. In the same vein, the limit for own goods would be N5 million, with a new premium of N20,000.

The commission added that the Insurance premium rate payable on staff buses is now N20,000 and its TPPD would be N3 million.

Other commercial vehicles: Similarly, commercial vehicles, trucks and general cartage now have a TPPD limit of N5 million with an N100,000 premium rate while ‘special types’ now have a TPPD limit of N3 million and a premium of N20,000.

  • For Tricycles, the TPPD limit is now N2 million with a premium of N5000 while motorcycles now have a TPPD limit of N1 million and a premium of N3000.
  • The commission also noted that the Comprehensive insurance policy premium rate shall not be less than 5 per cent of the sum insured after all rebates or discounts.

 


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Tags: National Insurance Commission (NAICOM)
Zainab Iwayemi

Zainab Iwayemi

For further inquiries about this article, contact: Email: zainab.iwayemi@nairametrics.com Twitter: @IwayemiZainab LinkedIn: Zainab Iwayemi

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Comments 3

  1. David Njemanze says:
    December 24, 2022 at 10:20 pm

    A 200percent increase in a service that has no impact on basics of life is meaningless. This will encourage the deployment of alternatives such as the forthcoming Lagos Monorail, grandstanding, influx of fake insurance documents, corruption etc. We note the rise in cost of public transportation and market prices from the exercise. It is becoming clearer that 2023 will not offer much socio-exonomic Felipe that Nigerians so much desire
    Perhaps what PENCOM should do instead is to encourage Nigerians to take up insurance products. The sector will remain the least performer on the stock exchange. All the companies are struggling and increased premium will not do them any good

    Reply
  2. Idi Issa says:
    December 25, 2022 at 2:53 am

    Third party insurance is the national specified minimum. In case of an accident, it confers no benefit. The premium is like free gift to the insurance company to build up free cashflow. Now NAICOM is compelling Nigerians to increase the free cashflow to the insurance companies.
    The major beneficiaries of motor vehicle insurance are holders of comprehensive insurance.
    I think the national assembly should wade into this mess before NAICOM further kills the insurance sector where most of the listed players are barely surviving. The current N5000 is even too expensive as there are no benefits attached to it and vehicle owners pay yearly like ritual offerings

    Reply
  3. Akolisa Arah says:
    December 25, 2022 at 8:45 am

    A nation where Insurance premium and monthly energy bill is more than the national minimum wage is a joke. Third party insurance is the national specified minimum. In case of an accident, it confers no benefit. The premium is like free gift to the insurance company to build up free cashflow. Now NAICOM is compelling Nigerians to increase the free cashflow to the insurance companies.
    The major beneficiaries of motor vehicle insurance are holders of comprehensive insurance.
    I think the national assembly should wade into this mess before NAICOM further kills the insurance sector where most of the listed players are barely surviving. The current N5000 is even too expensive as there are no benefits attached to it and vehicle owners pay yearly like ritual offerings

    Reply

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