NAICOM Increases Third-Party Motor Insurance Cost From N5,000 To N15,000

The National Insurance Commission has raised the premium for third-party motor insurance premium from N5,000 to N15,000 effective January 1, 2023.

The commission disclosed this in a circular with the number ‘NAICOM/DPR/CIR/46/2022 to all insurance companies titled ‘New premium rates for motor insurance’.

NAICOM also stipulated the rates  of other insurances for road users in the circular signed by its Director of Policy & Regulation, Leo Akah.

“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 motor insurance premium rates effective from 1 January 2023,” the circular read.

It further stated that comprehensive motor insurance policy premium rate will not be less than five per cent of the sum insured after all rebates and discounts.

The commission noted that effective January premium on private motor shall be N15,000, while Third Party Property Damage (TPPD) which is the limit of claims an insured can enjoy on the policy shall be N3,000.

Also, under the private category, Own Goods shall henceforth attract a new premium of N20,000 and TPPD of N5,000 while staff bus will be subjected to a new premium of N20,000, and TPPD of N3,000.

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For the commercial category, the insurance regulator stated that trucks/general cartage shall attract N100,000 premium and TPPD of N5,000.

The approved rates include N20,000 premium for own goods motor insurance for which policy holders are entitled to collect N5 million claims in the event of an accident.

The new premium rate on a staff bus is N20,000 while the insured can collect N3 million claims in the case of an accident.

Commercial vehicles such as trucks/general cartage can now apply for N5 million claims limit for a new premium rate of N100,000; special types of insurance have a claims limit of N3 million after paying the new premium of N20,000.

Tricycles (keke NAPEP) owners will pay N5,000 insurance to enjoy N2 million claims while motorcycle insurance premium is now N3,000 with a claims limit of N1 million.

The implication of this new rates to the industry is that insurance companies will harvest more premium income from motor insurance business from 2023 going forward.

The third party insurance was also inclusive of Ecowas Brown Card.