In the face of economic challenges, an alarming revelation surfaces: nearly 9 million vehicles traverse Nigerian roads without insurance, as disclosed by LEADERSHIP.
Data extracted from the Federal Roads Safety Corps (FRSC) and the Nigerian Insurers Association (NIA) illuminate the staggering reality: out of 12 million vehicles navigating the country’s thoroughfares, merely 3.11 million are insured as of the close of 2023, representing a mere 25 percent coverage.
With economic strains denting disposable incomes, many motorists find themselves unable to prioritize insurance amidst soaring living costs. The relentless surge in fuel prices and vehicle spare parts exacerbates the dilemma, prompting some to sell their vehicles or leave them dormant at home, dismissing the need for insurance coverage.
Tragically, among the 9 million uninsured vehicles, fraudulent motor insurance papers proliferate, while others lack any insurance shield. Even those who once possessed genuine insurance policies fail to renew them in the wake of challenging economic climates.
Under the FRSC Act, every vehicle on Nigerian roads mandates, at the minimum, a third-party motor insurance policy or comprehensive coverage, which typically commands around 10 percent of a vehicle’s value.
The prevalent preference for counterfeit insurance stems from its affordability and a desire to circumvent legal ramifications, propelled by a dearth of awareness regarding the benefits of authentic insurance covers.
Despite concerns that the number of uninsured vehicles may escalate without immediate economic respite, there remains skepticism about renewals when existing policies expire amid harsh economic conditions.
Chairman of the NIA, Segun Omosehin, attributes the drop in motor insurance subscriptions to economic adversities, coupled with a substantial increase in third-party motor insurance premiums from N5,000 to N15,000 last year. While acknowledging the challenges, Omosehin advocates for heightened financial education to foster greater insurance adoption, emphasizing its indispensable role in safeguarding future aspirations.
Amidst the tempest of economic uncertainties, the call for a conducive environment to bolster insurance resilience echoes. Yetunde Ilori, Director-General of NIA, underscores the adverse impacts of various macroeconomic policies on insurance subscriptions, underscoring the imperative of stability and collaborative efforts to steer the insurance sector through tumultuous waters.
