analysisBy Mohammed Shosanya and Chris Agabi
Lagos — Olubayo Onibanjo, a budding executive in a blue chip company based in Lagos, is a lover of sleek brand new cars. He therefore left no one in doubt when he emptied his account to acquire one of the latest brands of Toyota in fulfilment of his desire to cruise round the city with his dream automobile.
He tells anyone that cares that the Toyota is his princely jewel and has upgraded his status among his contemporaries.
But Olubayo would not want to take chances especially against the hurly-burly nature of Lagos city so he decided to undertake a third party auto insurance policy in a Lagos insurance company on the advice of his friend.
"My friend told me third party is compulsory. He told me it is particularly good for my car and will enable me to shed burden of repairing the car or taking care of other parties bills should there be accident"
On a fateful Monday morning, Olubayo's car had a collision with another car with a heavy impact on the latter. The thought of repairing the car initially weigh him down but he was spirit was lifted when he realized that he took insurance cover for his car.
What Olubayo thought will be an easy thing for the insurance company to indemnify him against the owner of the damaged car dragged on for months until he personally cough out money to repair the car.
"I was told to produce report on the damaged car. They also asked me to produce witnesses at the scene of the accident and documents. I was fagged out by the time I approached police for report. I was also weighed down by the impossibility of getting witnesses at the scene of the accident. At the end of the day, I considered it wise to repair the damaged car instead of endlessly waiting for my insurance company with protocol".
Olubayo's position echoes the perplexity and disenchantment most car owners in the country have for third party auto insurance policy. They said the policy is a rip-off and that they undertake it in order to fulfill all righteousness.
They also said in order climes, third party auto insurance policy is one that is human-friendly in terms of prompt and professional response to the claims of the holders of the policy by the insurance companies.
What is third party insurance policy?
Experts say third party auto insurance policy is that protects car owners from losses caused by their cars on other people.
Besides, the policy protects one against legal liability arising due to accidental damages, such as any permanent injury/death of a person, any damage caused to the property and caused while anyone is driving the insured vehicle.
The policy is valid for only a year and should be renewed annually. The premium of the insurance is dependent on certain parameters like vehicle classification, value etc.
What the law says about Third Party Motor Insurance
The Nigerian Insurance Act 2003 prescribed for compulsory Third-Party Motor Insurance in Section 68 of the Insurance Act, 2003.
Section 68 of the Insurance Act and Section 3 of the Motor Vehicle (Third Party) Insurance Act requires that no person shall use, or cause or permit any other person to use, a motor vehicle unless such a motor vehicle is insured against damage to the property of third parties.
According to section 68 (1),no person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability which he may thereby incur in respect of damage to the property of third parties is insured with an insurer Registered under this Act.
It said the insurance taken out pursuant to sub-section (1) of this section, shall cover liability of not less than N1 million.
It also said a person who contravenes the provisions of this section commits an offence and liable on conviction to a fine of N250,000 or imprisonment for 1 year or both. N5000 is amount to buy a third party motor insurance and its renewable annually.
The insurance law said for a motorist to drive on Nigeria roads, it is a legal requirement to have at least third party only (TPO) car insurance in order to ensure that third parties involved in an incident are protected.
It further said third party only will not cover a car in the event that it is stolen or burnt by fire.
"To protect against such losses, a driver may choose to upgrade to third party, fire & theft. Comprehensive cover will see your car repaired in the event of an accident. Third party only will, however, cover you for any injury or even death caused to third parties. It will also cover your legal costs in the event of such proceedings, but not any fines you may incur".
How to get indemnified under third party auto insurance
In order to get claims under the third party auto insurance, holders are expected to among other things note the licence plate number of the other vehicle involved in the accident (if any), note names and contact numbers of witnesses (if any), call the insurance company and file a claim. Make a note of the claim reference number given and the list of documents required for claim processing.
They will also check whether the insurance company has a preferred garage and make a note of the details of the same, file an FIR at the nearest police station in case of property damage, bodily injury, theft, or major damages, submit the documents to the insurance company's representative and verify it with originals and make any additional payments required to the garage if the insurance company does not cover the complete the expense of the repairs.
Does a motorist derive any benefit from third party auto insurance?
Most of the respondents, who spoke with our correspondent said third party auto insurance policy, render them no particular importance rather than mere vehicle documentation.
They also criticized the processes in filing claims by the holders of the policy, saying it time-consuming and monotonous. They also said insurance companies in the country have not done enough to educate Nigerians enough on the type of policies they undertake.
"All they care is about the quantum of customers they are able to grab. They do not educate us extensively on the kind of insurance policies and the advantages or what is involved in laying claims. Third party auto insurance is not better either. Infact insurers have capitalized on the compulsory nature of the policy to create some funny barriers to customers claim. I have not bothered to engage my insurance company for any claim even when my car hit a young man on the street some few years back. I bore the burden on my own," Mr Agbabiaka Ismeal, a self-employed man told our correspondent.
To Mr Suleiman Adetayo, a civil servant, the demand for police report, witnesses and all other documents put him off from engaging his insurance company few occasions when he had accident with his car.
According to him, there is also the fear that insurers are too slow to respond to the need to respond to the demand of the holders of third party auto insurance." The slow response of my insurance company to my claim discouraged me from pressing further with the claim. They engaged in pushing paper up and down and telling you to come back the following. If I had obeyed them further, the young boy I hit with my car will die".
A teacher in a Lagos secondary school also shares similar experience and said third party auto insurance in Nigeria is a waste of money.
Process of claim not boring
Adams Oyenyole an insurance practitioner, said the process of filing claims by holders of third party auto insurance is not boring as claimed.
According to him, the documents required for filing claim under the policy and other conditions are in line with insurance law in the country and global best practices.
He said insurance is a delicate profession so it behoves practitioners to be meticulous while handling the issue of claim by policy holders.
"We need police report in order to buttress that policy holders car has accident with other cars or persons. We also need witnesses if there are any just as we also need proper method of filing this claim, which I belief is not boring an inch. This is to serve the customers better while also complying with the principle of proximate cause in insurance."
He blamed the hue over third party auto insurance on the fact that most motorist take fake third party insurance in Nigeria to. He said the development makes it difficult for them to access claims when such claims arise.
He also posits that many motorists are ignorant about their rights when they enter into third party insurance contract, adding that even when they have genuine insurance, they don't access claims.
He explained the ignorance has allowed for lots of illegal insurance companies issuing fake and worthless third party auto insurance to unsuspecting Nigerians.
He said his company has paid claims to number of customers who filed their claims appropriately.