By Chiamaka Ajeamo
Out of the estimated 13 million registered vehicles plying public roads in Nigeria, only about three million are insured and have at least the compulsory third-party motor insurance certificate; investigations from Daily Sun have revealed.
This means that 10 million motorists are risking the lives of Nigerians by driving vehicles with invalid insurance certificates since only three million vehicles on the roads have authentic insurance cover.
It was gathered that the uninsured vehicles included private ones, those owned by the government, companies and organisations.
The third-party motor insurance stands as the minimum legal insurance requirement which every motorist in the country is mandated to have in order to ply any public road and it also specifies compensation to accident victims. Hence, it is a criminal offence for any Nigerian to drive his or her vehicle on any public road without this form of insurance cover.
Section 68 of the Insurance Act, 2003 states, that “no person shall use or cause or permit any other person to use a motor vehicle on a road, unless a liability, which he may thereby incur in respect of damage to the property of third parties, is insured with an insurer registered under this Act.”
Corroborating the above, the Federal Road Safety Corps (FRSC) Act also mandates all vehicles on Nigerian roads to have at least third-party motor insurance policy.
Aside the third-party motor insurance covering liability for the death or bodily injury to a third party arising from the use of the vehicle, it also covers damage to the property and the vehicle of a third party to the tune of N1 million and the penalty for non-compliance is imprisonment for one year or a fine of N250,000 or both in some cases.
Daily Sun investigations showed that due to the compulsory nature of the third-party motor insurance policy, many Nigerians have fallen prey to fraudsters who sell fake insurance papers while some, deliberately procure invalid ones from these same fraudsters in unauthorised agencies just to pass the various law enforcement check points on the road.
Further findings exposed those who intentionally obtain fake papers from agents, do so as a result of a high level of ignorance to the benefits of the policy, while some attribute it to the lack of integrity on the part of insurers to pay claims when the need arises.
Also, even though some vehicles parade fake insurance certificates to escape the wrath of the law enforcement agents, the few with genuine papers most times fail to renew their certificates when the existing cover expires.
It is vital to state that the third-party insurance certificate comes at a fixed price of N5, 000 for private vehicles, while commercial vehicles are charged N7,500 and N5,000 in some cases depending on the terms and conditions of the underwriter.
War on fraudsters
As part of measures to curb the menace of fake vehicle insurance certificate, insurers have commenced discussions with five states to ensure that motorists obtain insurance policy from genuine operators. Chairman, of Nigerian Insurers’ Association (NIA); the umbrella body of insurance underwriters, Ganiyu Musa, who disclosed this in Lagos, said aside discussion with the Lagos State, the insurers are currently discussing with Kaduna, Niger, Kogi and Ogun states to ensure that motorists get genuine insurance cover at the point of renewing their vehicle particulars at licensing offices across the aforementioned states.
Prior to this development, insurers do not have their representatives at the licensing office, hence, the opportunity fake operators utilised to sell fake third-party motor insurance policy to unsuspecting motorists at a cheaper price.
Musa, stated the industry was embittered about what it is losing to insurance racketeers and non-insurance of vehicles, adding that, the association on behalf of the insurance industry, aside engaging the five states, has plans to extend to other states as the time progresses.
“We are also working closely with the state Vehicle Inspection Service on enforcement of third party motor insurance in the state. We are also engaging Niger, Kaduna, Kogi and Ogun States, and remain hopeful that other states will see value in the platform and embrace it.
“Out of the estimated 13 million vehicles in Nigeria, only about 2,939,767 third party motor policies are in force as at Apr 26, 2021,” he added.
Musa, who is also the Group Managing Director/CEO of Cornerstone Insurance Plc, revealed that the association was also collaborating with the Federal Roads Safety Corps(FRSC) and the police to give them access to the Nigerian Insurance Industry Portal (NIIP), such that, when a vehicle is apprehended, they can assess whether such vehicle carries fake or genuine insurance certificates.
Commenting on the Nigerian Insurance Industry Database /Nigerian Insurance Industry Portal (NIID/NIIP), Musa said: “The Nigerian Insurance Industry database was established to reduce soft market practices and eliminate fake insurance policies.
“The association has taken a step further by creating the Nigerian Insurance Industry platform to enable vehicle owners’ purchase their third-party motor vehicle insurance cover from the comfort of their homes and telephones.
“So far, we are seeing a lot of traction on the platform across the states of the federation and we are hopeful that other states will key into the project before the end of the year.”
Previous measures by NIA to eliminate fake motor insurance
In 2019, the NIA in its numerous efforts to address the issue of fake motor insurance, launched a campaign tagged ‘Wetin U Carry?’ to educate motorists on the essence of obtaining genuine insurance policies for their vehicles.
The Director General of the NIA, Yetunde Ilori, said the aim of the campaign which ran for a month in Lagos was to constantly enlighten and remind Nigerians on the need to know the status of their vehicle insurance covers.
Ilori who disclosed then that, over 2.5 million vehicles with insurance policies have been uploaded on the Nigerian Insurance Industry Database (NIID), was optmistic that this campaign would further boost the effectiveness of the Unstructured Supplementary Service Data (USSD) Code*565*11# launched by the association as well as increase the number of vehicles with insurance in the country due to the education people will get from the campaign.
Speaking to Daily Sun recently on the progress of the USSD, she said; “For as long as people cannot differentiate between fake and genuine insurance covers, people will keep patronising fake agents. The awareness on the usage of USSD code *565*11# is gaining more ground as people depend on it daily to resolve issues bothering on genuineness of their policies.” While imploring vehicle owners to confirm the authencity of their insurance policy by dialing the USSD code on their phones; she warned motorists with fake vehicle certificates not to expect claims when an accident occurs.
“If you have genuine papers, you are entitled to claims when there is an insured risk, while those with fake paper don’t have this privilege,” she said.
Ilori maintained that the NIID remains one of the best ways to curb fake motor insurance policy in the country.
