Kolawole Abass is a regular shuttle bus driver along the Berger-Ikeja route – an artery he plied almost seamlessly for about two years until August 20, 2021, when he was involved in a collision.
Hardly had he started work that morning when his yellow commercial bus popularly known as danfo had a brake failure along Obafemi Awolowo Way, Ikeja and rammed into an interstate Toyota Hiace bus from the rear.
The impact resulted in major damage to the Hiace bus’ bumper and windshield. For minutes, 41-year-old Abass was transfixed, brooding over the monumental loss he had incurred.
True to his fear, the cost of repairing the bus was estimated at N250,000 which was way above the means of the father of four whose family depends on his daily income.
Abass was running around to raise money to repair the damaged bus when a relative drew his attention to the third party motor insurance policy he had obtained five months earlier for N7,500.
The relation told him the policy could work wonders and relieved him of the burden of repairing the Hiace bus, but he found the claim pretty incredulous.
On the guidance of his relation, Abass reluctantly reached out to his insurer via the number on his insurance certificate and was put through the process to make a claim. All along, he took the assurance that the company would take up the repair cost after necessary documentation and verification with a pinch of salt.
“My relation helped me to send pictures of my vehicle and that of the Hiace bus taken at the scene to the insurance company,” Abass recalled in Yoruba.
“We also submitted the particulars of the two vehicles and a police report. The company then asked for the repair cost and in about two weeks, the money was paid. I was extremely happy,” he said, flashing a broad smile.
“That was how I managed to avoid a debt that would have taken me many months to settle. I only borrowed money to fix my own vehicle which the insurance doesn’t cover.”
The Hiace bus owner, Deji Ajisafe, confirmed Abass’ account to our correspondent. He admitted that until the accident occurred, he never knew third party auto insurance was that beneficial.
Ajisafe said, “The danfo driver claimed his vehicle had a brake failure, but the damage was done already. The crash broke the bumper and the windshield of my vehicle.
“I took pictures and we both took the vehicles to a workshop where the cost of repair was estimated at N250,000, which the danfo driver could not afford. He begged me to give him some days to look for money.
“In the end, he said he would use his third party insurance policy to make a claim to repair my vehicle. I never believed it could work out. Surprisingly, that was what he used. My bus was repaired within three weeks at the expense of his insurer.”
Like Abass and Ajisafe, a number of motorists holding the third party motor insurance certificate are ignorant of its significance.
Many vehicle owners obtain it just because it is a compulsory prerequisite for driving on the highways, as stipulated by the Motor Vehicle Third Party Insurance Act of 1945, and to avoid being sanctioned by law enforcement agencies such as the Federal Road Safety Corps, Vehicle Inspection Service and the police.
Most of the drivers interviewed by our correspondent were not convinced that a premium as low as N5,000 (for a car) and N7,500 (for a bus) could spare them the burden of being liable for the damage they caused to another vehicle or injuries inflicted on a road user.
They believed they only stood a good chance of getting a claim via a comprehensive insurance policy, which is somewhat expensive but covers damage to both personal and the third party’s property.
Struggling to fix damage amid insurance cover
Oluwafisayo Ajibola was returning from a church service on Saturday, October 9 in his Toyota Rav 4 when he suddenly veered off the road and ran into a Mercedez Benz C320 parked in front of a shop on Wema-Oluyole road in the Apata area of Ibadan, Oyo State.
The two vehicles were badly damaged but the thought of getting money to repair the Mercedez Benz owned by one Dapo Ayodeji left Ajibola devastated despite having a valid third party insurance certificate.
His father, Rev. Sinai Ajibola, had to bear the brunt. He jettisoned his major financial commitments to repair the car in order to douse the ensuing tension.
“I have been paying the N300,000 repair cost in installments. I still sent N38,000 to him (Ayodeji) recently to repair the AC (air condition) of his car. I have spent almost N200,000 so far,” the reverend told Sunday PUNCH.
Although the Ajibolas later realised they could reach out to Oluwafisayo’s insurer to get a claim to repair the C320, efforts to access the benefit failed due to Ayodeji’s reluctance to release his vehicle particulars.
Sinai stated, “We want to try and see if the insurance company can come in. We asked Dapo (Ayodeji) for copies of his vehicle documents but he hasn’t produced them. I have stopped disturbing him about it. I will try to pay the remaining amount on behalf of my son.”
As of April 15, 2021, when he knocked down a 73-year-old man along Isheri road, Lagos, with his Honda Accord, Emmanuel Soriwei’s third party insurance policy was still three months to its July 22, 2021 expiry date.
A N30,000 deposit was demanded at a nearby private hospital where the septuagenarian was rushed to humbled the 36-year-old graphic designer, who only had N2,000 with which he intended to fuel his car on the way to his office in the Ogba area of the state that Thursday.
“I had to call my friends to lend me money. The man suffered a fracture and I borrowed more to pay for the hospital bill. In the end I spent close to N80,000,” he recalled.
While he struggled to settle his debts and meet pressing household responsibilities as a father, it never occurred to him to contact his insurer to make a claim for the victim.
“Does it work?” Soriwei retorted when asked why he didn’t leverage the cover his third party insurance provided.
He added, “I think it (the insurance certificate) is only useful for avoiding the trouble of law enforcement agents on the road. I always renew it every year but I didn’t know an insurance policy as low as N5,000 per annum could cover the injury to the elderly man.”
Poor sensitisation amid growing market
Being a compulsory minimum requirement, a third party motor insurance policy provides a huge market for insurance companies, especially because of its affordability. With about 11.8 million vehicles across Nigeria as of 2018 according to the National Bureau of Statistics, and still counting, the market potential of the policy has remained increasingly viable.
Although there are complaints over fake insurance certificates being paraded by many motorists, it has been significantly curtailed in recent years after the introduction of the Nigerian Insurance Industry Database.
A former Director-General, Nigerian Insurers Association, Mr. Sunday Thomas, had in an interview with The PUNCH, claimed that out of the estimated 16 million-17million vehicles on Nigerian roads, about 4.3 million vehicles were captured in the NIID.
He however admitted that the industry had continued to record an increase in the number of genuine insurance policies since the advent of the NIID through which law enforcement agents can verify any auto insurance certificates on the roads within seconds.
The Communications Manager, AIICO Insurance Plc, Ademola Adenekan, also confirmed to Sunday PUNCH that the rate of fake motor insurance policies in society had gone down.
He said, “VIOs have the capacity to confirm it on the roads. So, many motorists do not have a choice but to obtain a genuine one. The holder also receives an alert after processing the insurance certificate to confirm that it has been registered.
“To a large extent, the NIID platform has helped to curb the menace of fake auto insurance policies. At least, the public is now aware that any policy not on the database is not genuine.”
But while the level of awareness of forged insurance policies has increased remarkably, many vehicle owners are still left in the lurch on the benefits of obtaining genuine ones.
Third party motor insurance covers the policy holder’s liabilities arising from damage caused to the third party’s vehicle or property up to N1m. It also has unlimited cover in case of death or injury of the third party. However, this crucial information is unknown to the majority of the motorists interviewed by our correspondent.
Perhaps, Charles Uzochukwu wouldn’t have attempted to run away after a sachet water truck he drove broke the side mirror of a sports utility vehicle at Warewa, along the Lagos-Ibadan Expressway if he knew the damage was covered by the truck owner’s third party insurance certificate.
He was blocked from escaping by the victim, Mrs Esther Oladeji, who invited policemen to the scene. His truck was impounded at the Warewa Police Station for two days as deliberations over replacing the side mirror worth N100,000 went on.
As of May 2020 when the incident occurred, the insurance policy on the truck was just three months into the one-year validity period, but neither Uzochukwu and his boss nor Esther and her doctor husband thought of evoking the cover to sort out the damage.
“The driver and his boss begged us that they could not afford to replace the complete mirror. They were able to raise N25,000 which we used to fix the mirror instead of replacing it,” Oladeji’s husband, Raymond, explained.
“If I had known that we could benefit from a claim from the truck owner’s insurer, I might have considered that option because I am not satisfied with the repair. Another thing that might have discouraged me is the bureaucracy that may be involved in getting the claim. I don’t think I would have the patience,” he added.
Ibrahim Akanji, who shuttles between Lagos and Ilorin, Kwara State, is also among thousands of drivers with genuine third party insurance policies, but unaware of the benefits which would have come in handy for him when his Toyota Hiace bus hit a Volkswagen space bus at Sagamu toll gate, along Lagos-Ibadan Expressway early November owing to his negligence.
The damaged Volkswagen
“The bus was seriously damaged. The owner and I met with a panel beater and he was initially advised to buy a complete body for N450,000,” he revealed. “We later saw a panel beater who agreed to collect N130,000 for workmanship. We bought spare parts for N120,000. I begged the man (the vicitm) because I was supposed to be responsible for the entire repair. I eventually paid N150,000 out of the N250,000.”
Akanji said neither he nor the owner of the Volkswagen vehicle knew that with his (Akanji’s) insurance certificate, he could request his insurer to repair the bus at no cost to them.
“I have a genuine third party insurance paper. And you can see it,” he said, showing our correspondent the certificate. “I didn’t know I could make a claim with it. I got it for N7,500 just to avoid the harassment of FRSC officials, policemen and VIOs. I didn’t know it covers damage to the third party’s vehicle at all.”
When our correspondent imputed Akanji’s policy number on the NIID website, it revealed that it is valid till September 8, 2022.
Tackling poor awareness, ignorance of benefits
An insurance management professor and fellow, Associate Council of Insurance Brokers, Christian Nwite, maintained that ignorance of the importance of the third party insurance policy remained a major challenge. He also lamented poor sensitisation on the part of insurance firms, noting that it could be a deliberate attempt by some insurers to shy away from paying claims.
He said, “Most drivers who have genuine third party insurance policies are not aware of the significance of what they have. One of the greatest problems is that Nigerians are always in haste and are not ready to make claims. They don’t want anything that will delay them. They think approaching the insurance company is like committing suicide. Many people don’t even know they can make claims.
“Awareness is very important; the awareness is poor. They (insurance firms) are supposed to sponsor programmes on TV and radio. Some of them don’t like to spend money but they like to make money. The delay in resolving the claim will make some people lose interest though there is improvement now.”
Another expert, who is also an insurance professor, Joseph Aneke, blamed the low sensitisation primarily on the indifference of the National Insurance Commission, the industry regulator.
He noted that some motorists, who obtain fake third party insurance certificates from louts would have a rethink if they were well sensitised to the benefit of holding valid policies.
He said, “Insurance companies, because they are doing business, benefit from the ignorance of the people because most of the insured don’t understand the significance of the premium they pay. They obtain third party insurance policies for the sake of ‘police, let me pass’. It is not necessarily for the protection of the third party.
“The insurance companies are benefiting from that ignorance. People who should have been making claims don’t do so because of ignorance. Most clients don’t know, so they sort themselves out.
“The money they should have claimed, the insurance companies keep it and keep growing fat, making billions every year and declaring profits. Most people who have third party insurance are impatient and don’t even read the policy. They don’t understand its importance.”
Instead of engaging middlemen, Aneke advised vehicle owners to obtain their policies directly from certified insurance firms so as to have access to comprehensive information about the documents.
He stated, “When you are taking up an insurance policy in any insurance company, the first thing they do is that they give you a proposal form. After filling it, they will give you all the information you need about that insurance policy. They will give you a document stating the conditions under which they are liable and the extent of their liability. But because people don’t do due diligence to get a policy, they don’t have all this information.
“Many people are impatient to fill forms; they prefer to provide their information to agents to help them get the certificates. They are looking for a quick service. It is advisable for a policy holder to reach out to the company directly so that they will have all the information.
“The problem is that the majority of people using third party motor insurance don’t know it is for protection. They think it is just to avoid police harassment. Anybody who intends to use it for protection will take time to do the needful.”
The Head, Commissioner for Insurance Directorate of NAICOM, Rasaq Salami, requested our correspondent to send him a text message when contacted on the phone on Wednesday. However, he had yet to reply to an inquiry on what the commission is doing to enlighten motorists on the third-party motor insurance as of Saturday. Several calls to his line also rang out.
How to make a claim
Territory Manager, Law Union and Rock (now Tangerine General Insurance Limited), Paul Alonge, argued that the firm enlightened the public on the benefits of a third party motor insurance policy via “a quarterly radio programme.”
Rav4 crashed into C320
On how often the insured make claims, he said, “those who are aware that there is a cover for them do come. We are sensitising those that do not know that there is a cover of up to N1m for them. People are getting to know about the benefit but for now I can’t say the specific number of people that have benefited. Yes, it is a bit low but people are now responding.”
To make a claim, Alonge advised that a policyholder should take pictures of their vehicle and that of the third party damaged due to their (policy holder’s) fault; photograph the particulars of the two vehicles and call the phone number on the insurance certificate for further directive on how to file a claim.
He added, “A claim form will be sent to you to fill. You also need to get the estimate of repair cost. You will send those details to your insurer or your contact person (broker) and the company will start to process it for payment. Depending on how the claim is reported to the insurance company, ordinarily within a week or two, the claim will be paid.
“There is also another approach called subrogation to resolve a third party issue. If the person whom you damaged his car also has genuine third party insurance, he can decide to take up the process of repairing his car from his own insurance company.
“He will collect your insurance certificate and take it to his own insurance company. The company will repair his car and recoup the money back from your own insurance company.”
Also, AIICO spokesperson, Adenekan, said the company was intensifying efforts to create awareness and encourage more motorists with valid third party insurance policies to make claims for their victims.
He however parried questions on the number of third party insurance policies issued by the firm in 2020 and number of claims treated.
He said, “AIICO as a market leader in the insurance industry is making daily efforts to sensitise the public to their rights to claim in the case of an accident. This we do through a weekly newsletter to our customers and via our social media channels. We also use the traditional media to reach other segments of our audience.
“We have a weekly enlightenment programme on Lagos Traffic Radio tagged ‘Insurance of the Move.’ Insurance companies pay claims, but it’s important to note that we pay only genuine claims. Talking of ‘bureaucratic process,’ we have simplified and we keep trying to further shorten our claims process and pay within record time. If you hold a genuine auto insurance cover, there is no need to fight on the road; when an accident occurs, just call your insurer.”
Adenekan highlighted “four simple steps” in making a claim as establishing who is liable at the point of accident and obtain their insurance certificate; taking a picture of the damaged vehicle immediately; sending documents (claim form, pictures and estimate of repairs to [email protected]) for processing and executing the discharge voucher sent by the company.
“After the four steps above, you can expect to get a credit alert from AIICO,” he added.