Third-party insurance premiums for private a vehicle will go up by 300 per cent by New Year’s day, which is two days away.
According to the new rate approved by the National Insurance Commission (NAICOM), a private vehicle that is presently paying an N5,000 premium for an N1 million Third Party Property Damage (TPPD) limit is now to pay N15,000 premium for a N3 million limit; N5 million limit for own goods with a premium of N20,000; while a staff bus is to pay N20,000 premium for N3 million limit.
In a circular dated 22nd December 2022 and addressed to insurance companies, NAICOM said that the new rates will take effect from January 1, 2023.
NAICOM explained that the upward adjustment of the rate was in line with the regulator’s exercise of its function of approving rates of insurance premiums under Section 7 of NAICOM act 1997, and other extant laws.
NAICOM explained that third-party motor insurance offers protection against damages caused by a person’s vehicle to another person’s vehicle or property.
The statement reads: “Pursuant to the exercise of its function of approving rates of insurance premium under Section 7 of NAICOM Act 1997 and other extant laws, the commission, hereby, issue this circular on the new premium motor insurance rates effective from January 1, 2023.
“Third-party insurance policies inclusive of ECOWAS Brown Card shall be as follows: private motor, N15,000, TPPD limit N3 million; 0wn goods, N20,000, TPPD limit N5 million; staff bus, N20,000, TPPD limit N3 million”.
According to NAICOM, commercial trucks and general cartage will pay a N100,000 premium for N5 million TPPD limit; tricycles to pay N5,000 for N2 million TPPD limit, and motorcycles to pay N3,000 for N1 million TPPD limit.
Also, “special types’’ of vehicles now have a TPPD limit of N3 million and a premium of N20,000.
The commission added that for a comprehensive motor insurance policy, the premium rate would not be less than five per cent of the sum insured after all rebates and discounts.
The commission further warned that failure by insurance firms to comply with the directive shall attract appropriate regulatory sanction.