Also, the industry is reportedly losing hundreds of billions of Naira to comprehensive motor insurance, which demands that 10 per cent of the cost of a vehicle be paid as annual premium, Leadership gathered.
According to data sourced from the Nigerian Insurers Association, NIA, there are about 16 million vehicles on roads across the country, with only 4 million of them having 3rd party insurance cover. This, however, leaves 12 million vehicles uninsured or parading fake insurance papers.
Third Party Vehicle Insurance comes at a fixed price of N5, 000 for privately used saloons, SUVs and Jeeps while commercial vehicles are charged N7, 500.
Further investigation shows that most of the motorists parading fake insurance papers do obtain them at Vehicle licensing offices, an agency that is under the purview of Vehicle Inspection Offices (VIO), even as there are racketeers who market this fake insurance to, especially, commercial vehicle drivers at their parks, garage and bus-stops.
The fake insurance paper, it was learnt, is being sold for N300 to N1000, while the paper carries names of insurance firms that did not exist. Most drivers go for fake insurance because it is cheap as well as to avoid the wrath of the law enforcement agents, as they have little or no knowledge of the benefits of buying original insurance cover.
Other uninsured motorists, it was learnt, prefer to settle their way out with law enforcement agents should in case they meet them on the roads.
Director General, NIA, Mr. Sunday Thomas disclosed that NIA, in a bid to increase genuine insurance adoption among motorists, had partnered with Federal Roads Safety Corps(FRSC) and VIOs in some states, such as Ogun and Lagos with plans to extend it to all the states as time goes on.
Thomas said, the insured vehicles captured on association’s database is still between 3.5 to 4 million, advising motorists to stop patronising fake insurers, who will only give them worthless papers that cannot be used to process claims, when the need arises.
He said the physical combat being witnessed on Nigerian roads because of vehicle accidents, could be avoided if the two parties have third party insurance as they just need to exchange their insurances to repair the damaged car at no cost.
Thomas explained that the NIID was introduced to curb the proliferation of fake motor insurance papers, provide information on the details of vehicles available on Nigerian roads, as well as enhance the verification of certificates in owners’ possession.
According to him, a motorist can check his motor insurance policy status by sending his vehicle details as an SMS to a dedicated NIID number or through the database’s website.