Only 2.53 million of out of the 12 million registered vehicles on Nigerian roads, have genuine motor insurance certificates leaving, about 9.5 million uninsured, LEADERSHIP learnt.
According to the Nigerian Insurers Association (NIA), there are currently 12 million registered vehicles on roads across the country with 5 million of the cars residing in Lagos State.
Investigation shows that some of these 9.5 million vehicles parade fake motor insurance papers, while some did not have any insurance coverage even as few who had genuine insurance papers before have failed to renewed when their previous Motor insurance cover expired.
The Federal Roads Safety Corps (FRSC) Act demands that any automobile on Nigerian roads must have at least third party motor insurance policy or comprehensive insurance coverage which goes for 10 per cent of the value of a vehicle.
Third Party Vehicle Insurance comes at a fixed price of N5, 000 for privately used saloons and SUVs, while commercially used vehicles are charged N7, 500.
To this end, insurance industry is losing billions of Naira on motor insurance to fake insurance racketeers who sell only papers to motorists.
Investigation revealed that most drivers go for fake insurance because it is cheap as well as to avoid the wrath of the law enforcement agents, as they have little or no knowledge of the benefits of buying original insurance cover. Other uninsured motorists, it was learnt, prefer to bribe their way out with law enforcement agents should in case they meet them on the roads.
But insurance operators, under the auspices of the Nigerian Insurers Association(NIA) is set to tackle the menace of fake motor insurance papers on Nigerian roads by launching a campaign tagged 'Wetin U Carry' where vehicle owners can confirm the authenticity of their insurance papers by dialing *565*11# on their phones.
Speaking on this development yesterday at a media briefing to unveil the initiative in Lagos, the director-general, NIA, Mrs. Yetunde Ilori, said the 2.53 million vehicles registered on the Nigerian Insurance Industry Database (NIID) are those with genuine insurance papers, noting that, most motorists are either uninsured or parading fake insurance certificates.
She warned motorists with fake vehicle certificates not to expect claims when accident happens, unlike those with genuine insurance certificates, urging vehicle owners to confirm the genuineness of their insurance coverage through the aforementioned code.
In the past, the president, Nigerian Council of Registered Insurance Brokers(NCRIB), Mr. Shola Tinubu, had expressed his dissatisfaction that despite the existence of compulsory insurance Act of which Third Party Motor Insurance is part of, some motorists have decided to patronise fake insurers at the detriment of the registered insurance firms, while some are uninsured, thereby, making insurance industry loses billions of Naira on an annual basis.
While calling on relevant stakeholders to increase insurance awareness to let some of these motorists and other Nigerians understand the benefits of insurance, he urged the people to do their insurances through brokers, as insurance brokers have the needed expertise to advise them on the right policies that suit their needs.
Also, the managing director, Consolidated Hallmark Insurance PLC, Mr. Eddie Efekoha, had, earlier in the year, urged government and law enforcement agencies to support insurers by enforcing the procurement of compulsory insurances, adding that operators cannot be selling products and at the same time carry out enforcement.
He believes if there is proper enforcement and the right sanctions meted on the violators, road users would not want to put their cars on the roads without valid cover.
With enforcement, he said, the insurance industry will not only get more premium income, it would also increase the contribution of insurance industry to the nation's Gross Domestic Product (GDP).