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12 million Nigerian motorists carry fake insurance papers

By on February 9, 2016

Most motorists are endangering the lives of other road users by driving vehicles on Nigerian roads without appropriate insurance certificates, investigation has revealed.

Instead of procuring valid certificates that would provide insurance cover and compensation for road users in times of accident, a large number of the motorists buy cheap papers from fraudsters in unauthorised areas.

However, operators in the insurance industry are collaborating with law enforcement agencies to end the fake certificate business in the country.

The Director-General, Nigerian Insurers Association, Mr. Sunday Thomas, said the industry had continued to record increase in the number of genuine insurance policies registered in its Nigerian Insurance Industry Database.

“The vehicles on Nigerian roads are estimated to be between 16 million and 17 million, but what we have registered in our database is about 4.3 million vehicles,” he said.

Thomas also explained that out of these 4.3 million, it was possible that the insurance covers of some had expired and had not been renewed.

He added that the association was trying to separate the expired policies from the current ones so as to determine the actual number of vehicles with genuine insurance.

Thomas explained that the NIID was introduced to curb the proliferation of fake motor insurance papers, provide information on the details of vehicles available on Nigerian roads, as well as enhance the verification of certificates in owners’ possession.

According to him, a motorist can check his motor insurance policy status by sending his vehicle details as an SMS to a dedicated NIID number or through the database’s website.

As of October 2014, he noted that only 2.7 million vehicles had been registered in the NIID, which was an improvement from a figure of about one million in the corresponding period of 2013.

According to him, all registered insurance companies operating in Nigeria subscribe to the NIID and they regularly upload the details of vehicle covers that they handle onto the database.

About seven years ago, the National Insurance Commission, the regulator of the insurance sector, said 90 per cent of vehicles on Nigerian roads had fake insurance papers. The industry commenced a joint effort to stem this tide by introducing the NIID soon after.

Before the official introduction of the NIID, NAICOM collaborated with the Nigeria Police to raid offices and areas notorious for the sale of fake insurance papers.

The association has continued to distribute the NIID mobile devices to law enforcement agencies in different states of the federation to enable them to confirm the genuineness of insurance certificates in the possession of motorists.

Last year, the NIA presented some of the devices to the Lagos State Ministry of Transport, and also promised to facilitate a training programme for Vehicle Inspection Officers in the state.

Section 68 of the Insurance Act, 2003 states, “No person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability, which he may thereby incur in respect of damage to the property of third parties, is insured with an insurer registered under this Act.”

The law states that the insurance shall cover liability of not less than N1m and that a person who 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 imprisonment for one year.

The Group Managing Director, Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi, attributed the high rate of fake motor insurance papers to inaccessibility of the companies.

“Go to the core North and even in some places in the South West, how many insurance companies have branches there? Go to some rural areas, what is the means of transport there? But if you are not accessible and available, they will go for fake insurance papers,” he said.

Ogunbiyi observed that many Nigerians with fake papers obtained them just to show to the police that they had complied with the insurance requirements.

The Managing Director, Law Union & Rock Insurance Plc, Mr. Jide Orimolade, attributed the patronage of the cheap fake papers to low awareness of insurance.

“Awareness of the relevance of genuine insurance is low and enforcement is still a challenge, but it is improving now,” he said.

During a visit by the Association of Registered Insurance Agents of Nigeria to the office of the Zonal Commanding Officer, Zone RS2, Federal Road Safety Corps, Lagos, the FRSC said it would work with the insurers.

The Assistant Corps Marshal, FRSC, Nseobong Akpabio, said the corps was working with the insurers to enlighten Nigerians on the importance of genuine insurance policies.

“The role of insurance companies in ensuring road safety is enormous; if more insurance companies can partner the FRSC in creating awareness, drivers will be able to know that they can get claims if they have cover and people are benefiting from it and more drivers will insure,” he said.

Akpabio also observed that lots of motorists ignorantly took fake insurance certificates from non-existing companies.

The President, Nigerian Council of Registered Insurance Brokers, Mr. Kayode Okunoren, said the industry would continue to enlighten road users that taking fake insurance certificates was of no benefit to them.

“It is like throwing money down the drain; so, we will continue to increase awareness of it,” he said.

According to him, the circulation of fake insurance papers has been on for a long time and it will take some time for it to disappear completely.