Dr Samuel Onyeka, an insurance consultant, has supported the upward review of third party motor insurance premiums by the National Insurance Commission (NAICOM).
Onyeka, Director of Transparent Protection Ltd. (TPL)/Gte, a Non-Governmental Organization (NGO), said the review would help curb fake insurance and facilitate payment of claims by insurance companies.
The News Agency of Nigeria (NAN) recalls that NAICOM has in December, released a circular for the review of N5,000 to N15,000 for third party motor insurance premium for private vehicles, effective January 1.
Insurance experts said contrary to the views that it is not the right time to increase; review will help the industry function effectively.
“There is no jurisdiction in the world where property insurance is sold for N5,000.
“The reason why we don’t have insurance companies that settle claims on third party policies is because of lack of funds.
“When insurance companies don’t settle claims because they don’t have money, you have a lot of people selling fake insurance certificates, but when insurance companies start taking responsibility for issuing policies that they know will settle claims, the problem will decrease. .
“And NAICOM is ready to implement it, therefore, it will be easier to eliminate fake insurance.
“The insurance business is designed in such a way that insurers collect premiums and settle claims from the collected premiums.
“For the insurer to be able to settle the claim, the collected premium must be significant enough to cover the risk premium (the amount to be paid in case of loss).
“If insurance companies in the country are going to settle third-party claims, they must be able to build a premium base,” Onyeka said.
They list some of the things covered by third party insurance including life, bodily injury and property damage.
Onyeka said the new rates also include ECOWAS brown card protection which guarantees motorists prompt compensation for accidents caused outside their usual home.
According to him, this is a win-win situation for motorists.
He urged motorists to purchase a third party motor insurance policy from a registered insurance company to avoid any problems in the event of an accident or loss.
“We think that what NAICOM is doing is a step in the right direction,” he said.
TPL/Gte is an NGO created to support the development of the insurance sector in the country.