In the penultimate week of December 2022, the National Insurance Commission (NAICOM), released the New Premium Rates For Motor Insurance, thus bringing to an end the one year wait for the new rates, the most popular of the class private third party, had its premium raised to N15,000.00 from prior N5,000.00.
The corresponding third party property damage (TPPD), was also raised to N3 million, the prior limit was N1 million. The remaining policy types under the private category: own goods and staff bus had a new premium fixed at N20,000.00 with varied TPPD of N5 million and N3 million. For the commercial category, the new premium ranged from N100,000.00 for trucks/general cartage to N20,000.00 for special types while tricycle and motor cycle respective new premium were N5,000.00 and N3,000.00. Their TPPD were in the descending order of N5 million N3 million, N2 million and N1 million
For the comprehensive class of motor insurance, NAICOM states, “policy premium rate shall not be less than five percent (5%) of the sum insured after all rebates/discounts.”
However, reactions to the new premiums have been mixed while some motorists have accepted the new rates others are jostling for lower bargain and sources in the insurance market especially the underwriters said £its been a bit challenging. Clients call for premium computation and never come back.” Such reaction is an indication that they other alternatives with lower premium or a purchase of cover that do not provide indemnity at risk occurrence.
An underwriter narrating transaction experiences said, “I’ve lost some transactions due to the new premium rate. Its not been funny at all.” Those intending policyholders turning back some of them suggest, are probably turning to some companies that are giving lesser rate.