Indications have emerged on how some 8.9 million of the 12 million vehicles on Nigerian roads parade the country with fake insurance policies.

Checks by The Guardian showed that only about 3,013,205 Third Party Motor policies are in force, leaving behind 8,986,795 million motorists plying roads with fake, expired, or non-insurance papers in the country.

This development has remained a major concern to stakeholders in the Insurance industry.

In 2022, when Third Party Motor Insurance was at a fixed price of N5,000 for private saloons and SUVs cars, commercial vehicles were charged N7, 500 and in some cases, The Guardian investigations then revealed that most drivers went for fake insurance papers. This was because it was cheaper and ranged between N2, 000 to N3,000. They also did this to avoid the wrath of law enforcement agents, as they have little or no knowledge of the benefits of buying original insurance coverage.

Early in 2023, after months of speculations, the National Insurance Commission (NAICOM) reviewed the rate, raising it by 200 per cent, from N5, 000 to N15, 000. Then, each subscriber could claim up to N3 million in damages done to a third party. Recall that when the certificate was N5,000, the maximum claims limit was N1 million.

Section 68 of the Insurance Act 2003 states that “no person shall use or cause any other person to use a motor vehicle on the road unless a liability, which he may thereby incur in respect of the damage to the property of third parties is insured with an insurer registered under its act. The policy states that the law shall cover the liability of not less than one million and that a person that contravenes the provisions of that section of the law commits an offence and will be liable on conviction to a fine of N250, 000 or imprisoned for one year.”

Speaking on this development in the industry, the Director-General, the Nigeria Insurers Association (NIA), Mrs. Yetunde Ilori, said that vehicles registered on the Nigerian Insurance Industry Database (NIID) are those with genuine insurance papers, noting that, those motorists with fake papers are either uninsured or parading fake insurance certificates.

Ilori warned motorists with fake vehicle certificates not to expect claims when an accident happens, unlike those with genuine insurance certificates, urging vehicle owners to confirm the genuineness of their insurance coverage through the aforementioned USSD code *565*11#code.

According to her, this was the reason some Nigerians are complaining that insurance companies are not paying claims.

According to her, this happened because they do not have genuine insurance coverage “as you can see in some licensing offices where you buy third-party motor insurance at the rate of N2,000.”

Still on this development, the president, the Nigerian Council of Registered Insurance Brokers (NCRIB), Rotimi Edu, at an event, titled: “Evening with Brokers,” in Lagos, expressed his dissatisfaction that despite the existence of the 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 lose billions of Naira every year.

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 insurance through brokers, as insurance brokers have the needed expertise to advise them on the right policies that suit their needs.

To encourage motorists and also give incentives that could attract them to embrace Third Party Motor Insurance in the country, the Chief Customer and Marketing Officer, AXA Mansard Insurance, Jumoke Odunlami, at an event to launch Awoof Xtra promo for 3rd Party Motor Insurance policy, 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.

Odunlami 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.