Punch
Third party auto insurance is the minimum, mandatory requirement every vehicle owner in Nigeria must have but many motorists with valid policies are unaware of the huge benefits, AFEEZ HANAFI writes.
Kolawole Abass is a regular shuttle bus driver along Berger-Ikeja route – an artery he plied almost seamlessly for about two years until August 20, 2021 when he was involved in a collision.
Hardly had he started work that morning when his yellow commercial bus popularly known as danfo had a brake failure along Obafemi Awolowo Way, Ikeja and rammed into an interstate Toyota Hiace bus from the rear.
The impact resulted in major damage to the Hiace bus’ bumper and windshield. For minutes, 41-year-old Abass was transfixed, brooding over the monumental loss he had incurred.
True to his fear, the cost of repairing the bus was estimated at N250,000 which was way above the means of the father of four whose family depends on his daily income.
Abass was running around to raise money to repair the damaged bus when a relative drew his attention to the third party motor insurance policy he had obtained five months earlier for N7,500.
The relation told him the policy could work wonders and relieved him of the burden of repairing the Hiace bus, but he found the claim pretty incredulous.
On the guidance of his relation, Abass reluctantly reached out to his insurer via the number on his insurance certificate and was put through the process to make a claim. All along, he took the assurance that the company would take up the repair cost after necessary documentation and verification with a pinch of salt.
“My relation helped me to send pictures of my vehicle and that of the Hiace bus taken at the scene to the insurance company,” Abass recalled in Yoruba.
“We also submitted the particulars of the two vehicles and a police report. The company then asked for the repair cost and in about two weeks, the money was paid. I was extremely happy,” he said, flashing a broad smile.
“That was how I managed to avoid a debt that would have taken me many months to settle. I only borrowed money to fix my own vehicle which the insurance doesn’t cover.”
The Hiace bus owner, Deji Ajisafe, confirmed Abass’ account to our correspondent. He admitted that until the accident occurred, he never knew third party auto insurance was that beneficial.
Ajisafe said, “The danfo driver claimed his vehicle had a brake failure, but the damage was done already. The crash broke the bumper and the windshield of my vehicle.
“I took pictures and we both took the vehicles to a workshop where the cost of repair was estimated at N250,000, which the danfo driver could not afford. He begged me to give him some days to look for money.
“In the end, he said he would use his third party insurance policy to make a claim to repair my vehicle. I never believed it could work out. Surprisingly, that was what he used. My bus was repaired within three weeks at the expense of his insurer.”
Like Abass and Ajisafe, a number of motorists holding the third party motor insurance certificate are ignorant of its significance. Many vehicle owners obtain it just because it is a compulsory prerequisite for driving on the highways, as stipulated by the Motor Vehicle Third Party Insurance Act of 1945, and to avoid being sanctioned by law enforcement agencies such as the Federal Road Safety Corps, Vehicle Inspection Service and the police.
Most of the drivers interviewed by our correspondent were not convinced that a premium as low as N5,000 (for a car) and N7,500 (for a bus) could spare them the burden of being liable for damage they caused to another vehicle or injuries inflicted on a road user.
They believed they only stood a good chance of getting a claim via a comprehensive insurance policy, which is somewhat expensive but covers damage to both personal and the third party’s property.
Struggling to fix damage amid insurance cover
Oluwafisayo Ajibola was returning from a church service on Saturday, October 9 in his Toyota Rav 4 when he suddenly veered off the road and ran into a Mercedez Benz C320 parked in front of a shop on Wema-Oluyole road in the Apata area of Ibadan, Oyo State.
The two vehicles were badly damaged but the thought of getting money to repair the Mercedez Benz owned by one Dapo Ayodeji left Ajibola devastated despite having a valid third party insurance certificate.
His father, Rev. Sinai Ajibola, had to bear the brunt. He jettisoned his major financial commitments to repair the car in order to douse the ensuing tension.
“I have been paying the N300,000 repair cost in installments. I still sent N38,000 to him (Ayodeji) recently to repair the AC (air condition) of his car. I have spent almost N200,000 so far,” the reverend told Sunday PUNCH.
Although the Ajibolas later realised they could reach out to Oluwafisayo’s insurer to get a claim to repair the C320, efforts to access the benefit failed due to Ayodeji’s reluctance to release his vehicle particulars.
Sinai stated, “We want to try and see if the insurance company can come in. We asked Dapo (Ayodeji) for copies of his vehicle documents but he hasn’t produced them. I have stopped disturbing him about it. I will try to pay the remaining amount on behalf of my son.”
As of April 15, 2021 when he knocked down a 73-year-old man along Isheri road, Lagos, with his Honda Accord, Emmanuel Soriwei’s third party insurance policy was still three months to its July 22, 2021 expiry date.
A N30,000 deposit demanded at a nearby private hospital where the septuagenarian was rushed to humbled the 36-year-old graphic designer, who only had N2,000 with which he intended to fuel his car on the way to his office in the Ogba area of the state that Thursday.
“I had to call my friends to lend me money. The man suffered a fracture and I borrowed more to pay for the hospital bill. In the end I spent close to N80,000,” he recalled.
While he struggled to settle his debts and meet pressing household responsibilities as a father, it never occurred to him to contact his insurer to make a claim for the victim.
“Does it work?” Soriwei retorted when asked why he didn’t leverage the cover his third party insurance provided.
He added, “I think it (the insurance certificate) is only useful for avoiding the trouble of law enforcement agents on the road. I always renew it every year but I didn’t know an insurance policy as low as N5,000 per annum could cover the injury to the elderly man.”
Poor sensitisation amid growing market
Being a compulsory minimum requirement, third party motor insurance policy provides a huge market for insurance companies, especially because of its affordability. With about 11.8 million vehicles across Nigeria as of 2018 according to the National Bureau of Statistics, and still counting, the market potential of the policy has remained increasingly viable.
Although there are complaints over fake insurance certificates being paraded by many motorists, it has been significantly curtailed in recent years after the introduction of the Nigerian Insurance Industry Database.
A former Director-General, Nigerian Insurers Association, Mr. Sunday Thomas, had in an interview with The PUNCH, claimed that out of the estimated 16 million-17million vehicles on Nigerian roads, about 4.3 million vehicles were captured in the NIID.
He however admitted that the industry had continued to record an increase in the number of genuine insurance policies since the advent of the NIID through which law enforcement agents can verify any auto insurance certificates on the roads within seconds.
The Communications Manager, AIICO Insurance Plc, Ademola Adenekan, also confirmed to Sunday PUNCH that the rate of fake motor insurance policies in society had gone down.
He said, “VIOs have the capacity to confirm it on the roads. So, many motorists do not have a choice but to obtain a genuine one. The holder also receives an alert after processing the insurance certificate to confirm that it has been registered.
“To a large extent, the NIID platform has helped to curb the menace of fake auto insurance policies. At least, the public is now aware that any policy not on the database is not genuine.”
But while the level of awareness of forged insurance policies has increased remarkably, many vehicle owners are still left in the lurch on the benefits of obtaining genuine ones.
Third party motor insurance covers the policy holder’s liabilities arising from damage caused to the third party’s vehicle or property up to N1m. It also has unlimited cover in case of death or injury of the third party. However, this crucial information is unknown to the majority of the motorists interviewed by our correspondent.
Perhaps, Charles Uzochukwu wouldn’t have attempted to run away after a sachet water truck he drove broke the side mirror of a sports utility vehicle at Warewa, along the Lagos-Ibadan Expressway if he knew the damage was covered by the truck owner’s third party insurance certificate.
He was blocked from escaping by the victim, Mrs Esther Oladeji, who invited policemen to the scene. His truck was impounded at the Warewa Police Station for two days as deliberations over replacing the side mirror worth N100,000 went on.
As of May 2020 when the incident occurred, the insurance policy on the truck was just three months into the one-year validity period, but neither Uzochukwu and his boss nor Esther and her doctor husband thought of evoking the cover to sort out the damage.
