Lagos — Insurance industry is set to gain about N48 billion the sector is losing to fake and about 9.6 million uninsured vehicles on Nigerian roads annually. But this can only come to be if the Consolidated Insurance Bill 2020, before the National Assembly (NASS) can become law, LEADERSHIP can exclusively reveal.
The bill already prescribed N5 million fines for fake insurance racketeers as well as heavy sanctions for the uninsured.
These, according to market observers, will force defaulting motorists to go for genuine insurance certificates, thereby, yielding N48 billion premium income to the insurance industry.
While believing this is a good development for an industry that is struggling to reach N1 trillion annual premium income target, experts advised the National Assembly as well as the federal government to, as a matter of urgency, ensure that the bill becomes law.
The Nigerian Insurers Association (NIA) had earlier disclosed that there are currently 12 million registered vehicles on roads across the country with five million of the cars residing in Lagos State. Of this number, the association regretted that only 2.36 million are currently insured, believing, if the bill becomes law and provisions there-in are enforced, the insurance industry can grow its annual premium income astronomically.
The 2.36 million insured vehicles, it was learnt, have all been registered on the Nigerian Insurance Industry Database (NIID) by their respective insurers.
Investigation shows that some of these 9.64 million vehicles parade fake motor insurance papers, while some did not have any insurance coverage even as few who had genuine insurance papers before have failed to renew when their previous motor insurance cover expired.
The Federal Roads Safety Corps (FRSC) Act demands that any automobile on Nigerian roads must have at least third party motor insurance policy or comprehensive insurance coverage which goes for 10 per cent of the value of a vehicle.
Third Party Vehicle Insurance comes at a fixed price of N5, 000 for privately used saloons and SUVs, while commercially used vehicles are charged N7, 500.
To this end, insurance industry is losing about N48 billion to non-insurance of these vehicles, assuming the 9.64 million vehicles purchase third party motor insurance, which is the minimum cover to have before driving a vehicle on Nigerian roads.
Investigation revealed that most drivers go for fake insurance because it is cheap as well as to avoid the wrath of the law enforcement agents, as they have little or no knowledge of the benefits of buying original insurance cover.
The fake insurance paper, it was learnt, is being sold between N1000 to N1500, while the paper carries names of insurance firms that were not existing.