The Nigerian insurance sector is losing over N50 billion to fake Third Party Motor Insurance yearly, findings by The Nation have revealed.
The conclusion was drawn from the Federal Road Safety Commission’s, FRSC’s, recent report that 12 million registered vehicles, including private and commercial, ply the roads. Also, latest report from the Nigeria Insurers Association (NIA) showed that only three million vehicles are insured.
Third Party Motor policy costs N5,000 for private saloons, sport utility vehicles and Jeeps, while commercial vehicles owners pay N7,500.
NIA Director-General Sunday Thomas said it was mandatory for motorists to have the policy before hitting the road.He said Section 38 of the National Insurance Act 2003 states that Third Party Motor Insurance was required as part of the minimum amount of auto cover one must have to carry on as a car owner. Penalties for non-compliance include a fine of up to N250,000 and, or one-year imprisonment.
He disclosed that only three million vehicles were insured in the country, adding that :”Over 12 million are without valid insurance. Their lack of valid insurance is a huge loss to the industry. We are losing premium income annually.”