Vehicle owners in Nigeria are set to receive enhanced compensation in the event of accidents, covering both self and third-party damage liabilities, as well as loss of vehicles. This change comes as a result of a review of the premium rates for motor insurance in the country, aimed at ensuring adequate coverage for liability costs amid rising inflation and foreign exchange shortages.
Implemented on January 1, 2023, the revised directive by the National Insurance Commission (NAICOM) entails significant adjustments to premium rates for private vehicles, owner goods vehicles, and staff buses. For instance, private vehicles now pay N15,000 premium for N3 million Third Party Property Damage (TPPD) limit, and owner goods vehicles pay N20,000 premium for N5 million claims limit.
Commercial trucks, tricycles, and motorcycles have also witnessed modifications to their premium rates to reflect the coverage they receive. Additionally, comprehensive motor insurance policyholders will pay a premium rate not less than 5% of the sum insured after applying all applicable rebates and discounts.
Moreover, the review brings new benefits to motorists traveling within the ECOWAS region through the ECOWAS Brown Card Scheme. This card ensures prompt and fair compensation for accidents that occur outside a motorist’s home country, providing greater peace of mind for those traveling across West African countries.
Industry analysts emphasize that the premium hike was long overdue, with the last increase occurring in 2004. Despite the initial concerns, they believe the benefits of the enhanced coverage outweigh the cost, given the current inflation and increased vehicle expenses.
Organizations such as the Nigeria Employers’ Consultative Association (NECA) also view the premium increase as beneficial for the economy and essential for effective risk mitigation and industry growth. NAICOM’s Head of Corporate Communications and Market Development, Mr. Rasaaq Salami, highlights the inclusion of the ECOWAS Brown Card in the new premium, simplifying the process for motorists traveling within the West African sub-region.
Overall, the revised premium rates aim to provide vehicle owners in Nigeria with more comprehensive coverage and better protection against potential risks and financial losses.