The National Insurance Commission (NAICOM) has increased the

premium rate for third party motor insurances policy in Nigeria effective from January 1, 2023.

Third party motor insurance is one of the compulsory classes of insurance and the most popular among the six compulsory insurance policies stipulated by the Insurance Act 2003.

The new directive came after several attempts made by the industry’s players to review the rate at industry committee meetings from 2021 to date, agreed on September this year, initially as the deadline for the announcement of a new premium rate, but their efforts proved abortive.

In the new directive, private vehicles that were paying N5,000 premium for N1m Third Party Property Damage (TPPD) limit, are now to pay an N15,000 premium for N3m, while owner-good vehicles are to pay N20m premium for N5m, and staff buses are to pay N20,000 premium for N3m.

This was contained in a circular issued on December 22, 2022, by NAICOM and sent to all insurance institutions. It was signed by the Commission’s Director, Policy and Regulation, Leonard Akah on behalf of the Commissioner for Insurance.

The circular read: “Under 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.”

“For commercial trucks and general cartage, they are to pay N100,000 premium for N5m TPPD limit; tricycles N5,000 for N2m TPPD limit, and motorcycles N3,000 for N1m TPPD limit.

“While for a comprehensive motor insurance policy, the premium rate shall not be less than five percent of the sum insured after all rebates and discounts.

“The commission noted that failure to comply with this circular shall attract appropriate regulatory sanctions.”