NAICOM: Third Party vehicle insurance now N15,000

National Insurance Commission (NAICOM)

Starting in January 2023, the minimum annual premium for Third Party insurance for motorists will increase from N5,000 to N15,000. This increase was mandated by the National Insurance Commission (NAICOM).

Approval is communicated to the insurance industry in a circular dated December 22, 2022, and given the internal reference number NAICOM/DPR/CIR/46/2022.

Mr Leo Akah, Director, Policy and Regulation, NAICOM, signed the document on behalf of the Commissioner for Insurance with the title New Premium Rate for Motor Insurance.

It read, “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 issues this circular on the new motor insurance premium rates effective from January 1, 2023.”

The commission also announced that the new premium for a private car policy would be N15,000, with the Third Party Property Damage (TPPD) limit of claims increased to N3 million.

A new premium of N20,000 was introduced, and the limit for own items was set at N5 million.

The yearly price for insuring company buses is N20,000, and the TPPD is $3 million.

According to NAICOM, the TPPD limit for commercial vehicles, trucks, and general cartage is now N5 million, with a premium cost of N100,000. The TPPD limit for “special types” is now N3 million, with a premium rate of N20,000.

Newly implemented TPPD limits for tricycles are N2 million with a premium of N5000, while those for motorbikes are N1 million with a premium of N3000.

The NAICOM standard for premium rates on comprehensive insurance policies is 5% of the sum insured (after applicable discounts).

The commission warned the insurance industry to follow the new regulation or face appropriate sanctions.

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