NAICOM: Vehicle owners to pay higher insurance premium rates from Jan 1

The National Insurance Commission (NAICOM) has increased the premium rates for vehicle insurance in the country.

In a circular dated December 22, 2022 and addressed to insurance companies, the commission said the new rates will take effect from January 1, 2023.

The circular was signed by Leo Akah, director, policy and regulation, NAICOM, on behalf of the commissioner for insurance.

NAICOM explained that the upward adjustment of rate was pursuant to the regulator’s exercise of its function of approving rates of insurance premium under section 7 of NAICOM act 1997, and other extant laws.

Under the new template, private vehicles that were paying N5,000 premium for N1 million third party property damage (TPPD) limit are now to pay N15,000 premium for N3 million limit; N5 million limit for own goods with a premium of N20,000; and staff buses are to pay N20,000 premium for N3 million limit.

NAICOM said third party motor insurance offers protection against damages caused by a person’s vehicle to another person’s vehicle or property.

“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 premium motor insurance rates effective from 1st January, 2023,” the statement reads.

“Third party insurance policies inclusive of Ecowas Brown Card, EBC, shall be as follows: private motor, N15,000, TPPD limit N3 million; 0wn goods, N20,000, TPPD limit N5 million; staff bus, N20,000, TPPD limit N3 million.”

According to NAICOM, commercial trucks and general cartage will pay N100,000 premium for N5 million TPPD limit; tricycles to pay N5,000 for N2 million TPPD limit, and motorcycles to pay N3,000 for N1 million TPPD limit.

Also, “special types’’ of vehicles now have a TPPD limit of N3 million and premium of N20,000.

The commission added that for comprehensive motor insurance policy, premium rate shall not be less than five percent of the sum insured after all rebates and discounts.

It further warned that failure by insurance firms to comply with the directive shall attract appropriate regulatory sanction.