From Uche Usim, Abuja
From January 1, next year, commercial and private vehicle owners will pay more for insurance cover as the National Insurance Commission (NAICOM) has increased their rates to N15,000 annually as against the current fee of N5,000.
Also approved was a N3 million Third Party Property Damage (TPPD) limit for private motor vehicles; N5 million limit for own goods, with premium of N20,000; staff bus premium, N20,000 and TPPD, N3 million.
For commercial vehicles, trucks/general cartage has TPPD limit of N5 million, premium N100,000; special types, TPPD limit of N3 million, premium N20,000; tricycle, TPPD limit N2 million, premium N5000 and motorcycle, TPPD limit N1 million premium N3000.
The regulator further explained that the comprehensive motor insurance policy premium rate shall not be less than five per cent of the sum insured after all rebates or discounts.
The new developments, seen as a reflection of current economic realities, were contained in a circular titled: “New Premium Rate for Motor Insurance:NAICOM/DPR/CIR/46/2022 and dated December 22, 2022.”
It was signed by the Director, Policy and Regulation, NAICOM, Leo Akah on behalf of the Commissioner for Insurance and NAICOM Chief Executive Officer, Mr Sunday Thomas and reticulated to all insurance institutions for immediate implementation.
NAICOM explained that the new move draws legitimacy from its statutory right to approve insurance premium as enshrined under Section 7 of NAICOM Act 1997 and other extant laws.
While expecting compliance to be total, it warned that institutions who flout the directive shall be visited with commensurate regulatory sanctions.
Industry watchers see the premium hike as a direct reflection of economic realities where ever-increasing inflation rate has swelled the prices of goods and services.