National Insurance Commission (NAICOM) of Nigeria announced towards the end of 2022 that a significant rise in insurance premium rates motorists must pay for the nation’s mandated third-party automobile insurance.
Owners of private automobiles will now pay N15,000 instead of N5,000 for motor vehicle third-party insurance under these new rates, which went into effect on January 1, 2023.
The National Insurance Commission (NAICOM), which oversees the insurance industry, announced the new prices in a circular sent to all insurance companies in the nation.
The mandatory third-party insurance for motor vehicles has increased by 200 percent as a result of the new premium rates.
The commission and the nation’s insurance chief executives debated the premium rate rise last year and established a committee to investigate it.
Leo Akah, Director of Policy and Regulation, NAICOM, signed the approval on behalf of the Commissioner for Insurance and it was included in a circular titled “New Premium Rate for Motor Insurance.”
According to NAICOM, the limit for Third-party Property Damage (TPPD) claims for private vehicles has increased from N1 million to N3 million. The limit for claims for own goods is N5 million with a premium of N20,000; staff buses are subject to a N20,000 premium and are eligible for a claims payment of N3 million.
The commission stated that the TPPD claims maximum is now N5 million for commercial vehicles, trucks, and general cartage on the payment of N100,000 premium, while the TPPD limit is N3 million for special types on the payment of N20,000 premium.
According to NAICOM, the TPPD maximum for tricycles is N2 million with a N5 000 premium, and N1 million with a N3 000 premium for motorbikes.
According to the commission, the comprehensive insurance policy premium rate cannot be less than 5% of the total amount insured after all reductions or rebates.