By Adémólá Òrúnbon
MOTOR third-party insurance or third-party liability cover, which is sometimes referred to as the ‘act only’ cover, is a statutory requirement under the Motor Vehicles Act. It is referred to as a ‘third-party’ cover since the beneficiary of the policy is someone other than the two parties involved in the contract (the car owner and the insurance company).
The policy does not provide any benefit to the insured. However, it covers the insured’s legal liability for death/disability of third-party loss or damage to the third-party property.Since the third-party insurance cover is mandatory, all non-life insurance companies have an obligation to provide this cover.
Many members of the insuring public and third party road users have not fully realised the importance of Motor (Third Party) Insurance in Nigeria. Motor (third party) Insurance covers the insured’s(policy holder) legal liabilities for death and bodily injuries to third parties and third party property damage.
While remedies for bodily injuries and death are unlimited since we cannot put value on life (never mind that some people attach no value to life in Nigeria) the limit for third party property damage is N1million.
This limit can be increased with payment of additional premium. So third party motor insurance is very important as far as third party road users are concerned. Now the issue starts from how we source this policy.
Many vehicle owners get theirs from motor park touts and touts in government offices. Who licenced them to issue policies? Do they have the consent of these insurance companies whose policies they are issuing?
The purchasers are not interested; they only want a paper to show the police, so that they can “let my people go”. With this mind-set, the whole essence of motor (third party) insurance, which is to have in place the minimum insurance to take care of the vehicle owner’s legal liabilities to third parties while using his vehicle on the road, is defeated.
Specifically, section 143 of the Road Traffic Act, states that: “A person must not use a motor vehicle on a road unless there is in force, in relation to the use of the vehicle by that person, such a policy of insurance or security in respect of third party risks…”
Many vehicle owners do not have the resources to take care of their legal liabilities for third party bodily injuries, death or property damage while using their vehicles on the road. These third parties include pedestrians, other vehicles, occupiers of these vehicles and properties owned by third parties.
This makes motor (third party) insurance even more imperative. In the event of an accident likely to lead to a claim, the policy holder, through his broker or in person, if he has no broker, must notify the underwriter as soon as possible.
His responsibility is to describe what happened. It is not his responsibility to accept liability for the loss; that is for the underwriter to determine, based on the account of the accident by policy holder. Please note that a third party motor policy provides relief for third parties only; it does not cover own damage or provide personal relief for the policyholder.
There is a variant of motor (third party) insurance in the market where for a premium of N10,000, the policy can be extended to cover own damage to the limit of N250,000. But it is a wonderful policy, because for just N5,000 premium, you transfer the unlimited liabilities for third party bodily injuries and death and limited third party property damage liabilities to your underwriter.
According to some analysts, the insurance industry loses about N530 billion yearly as a result of failure by vehicle owners to purchase the compulsory third party motor insurance. Findings revealed further that out of the about 11.8 million registered vehicles plying the road, only 1.2 million of them have valid insurance certificates.
This situation has deprived insurers the premium and exposed many road users to the menace of reckless vehicle users. The need to drive the uptake and acceptance of third party motor insurance cannot be over emphasised. This is scandalous and the implications are grave.
It means many Nigerian third party road users would have no access to any compensation in the event of bodily injuries, death or damage to their properties. Ignorance aside, any wonder that many road accidents are resolved with quarrels and fisticuffs.
Kudos to the Ogun State government for the introduction of e-Third Party Motor Insurance in the system. Now the motorists, cyclists and other stakeholders involved will be able to collect their insurance certificates without any stress, and with the security on the paper, it will be very cumbersome for touts and impostors to produce the fake document for our motorists.
Even, the governor of Ogun State, who is represented by the chief economic adviser and commissioner for finance, Mr. Dapo Okubadejo, at the official flag off of the e-Third Party Motor Insurance admitted that economic prosperity of the state largely depended on the contributions of residents and stakeholders who were involved in its growth and development.
He then appealed to prospective applicants of the new document to be wary of fake vendors, not to patronise touts and apply for it by proxy, adding that it is everybody’s responsibility to key into this scheme to nip the crooks and touts circulating fake third party insurance documents in the bud.
Equally, the Chairman, Ogun State Internal Revenue Service, OGIRS, Mr. Olugbenga Tony Olaleye, said the third party motor insurance certificate is the least policy motorists must obtain, before being eligible to use the road, noting that the scheme will be of great benefit to them.
He informed that his agency commenced total enforcement on all revenue items, warning members of the public to ensure all outstanding tax liabilities, including vehicle papers were updated. State Coordinator, Ogun e-Third Party Insurance Scheme, Mr. Akinyoola Moses Afolabi, said that National Insurance Commission, NAICOM, which supervised the recapitalisation process for the industry, including Nigerian Insurers Association, NIA, had agreed with the Nigeria Insurance Industry Platform, NIIP, to regularise the scheme.
For many vehicle owners, one of the measures to enforce compulsory motor (third party) insurance, which is checking of vehicle particulars by law enforcement agents, has become the reason for obtaining motor (third party) insurance. And many law enforcement agents have taken advantage of this mindset.
These law enforcement agents have not helped the industry, in particular, and Nigerians in general. They go to the road to check vehicle particulars not for love of mankind, Nigeria or the insurance industry, but because of what they can get from defaulters or gullible and ignorant vehicle users.
Mention must, however, be made of the few law enforcement agents who call insurance companies to confirm the authenticity of the motor policies purportedly issued by them or access the NIID right there on the road to confirm the authenticity of a policy. Only if the good law enforcement agents were in the majority.
*Òrúnbon, an opinion writer, poet, and public affairs analyst, wrote from Federal Housing Estate, Olomore, Abeokuta, Ogun State