Fear of being arrested and their vehicles impounded by law enforcement agents for putting same on the public road without insurance policy, motorists go for the cheapest third party policy, not knowing they could make successful claims for compensation from their insurers. CHIJIOKE IREMEKA reports
In Nigeria, it is a law to take a vehicle insurance policy before driving it on public roads and since most Nigerians buy insurance policies not to get into trouble with law enforcement agents on the roads, they choose to go for third party motor insurance, which is a lot cheaper than comprehensive policies.
Consequently, the preconceived notions that third party insurance policy is just to beat law enforcement agents, many don’t realise that a third party policy is actually legal and indemnifies the insured from third party losses. Third-party only insurance (TPO) offers one the legal minimum level of car insurance cover, and it’s the most basic one is able to get.
This kind of policy protects other people’s vehicles and property in the event of an accident that was deemed to be one’s fault. Say you drive into the rear of someone’s car, causing damage to the bumper and injuring the driver. Your third-party insurance would cover the cost of the other person’s car and medical expenses.
What is not covered is damage to your own car or any injuries you suffer. For that, you would need a comprehensive insurance policy.
Otherwise those costs are on you. Sunday Telegraph leant that your third party insurance does not cover you and your motor vehicle, rather it covers your legal liability for the damage you may cause to a third party only, such as bodily injury, death and damage to third party property, while using your vehicle.
Unfortunately, a lot of accident vehicles, which ordinarily would have been repaired by the insurance companies are borne by the car owners. For a third party motor policy, the first party is you; the second party is the insurance company while the third party is everyone else.
Compared to a comprehensive motor insurance policy, which typically has two insurance covers bundled together -the third party insurance and the own damages cover.
Some also come with a built-in personal accident cover. As the names suggest, the ‘own damages’ and ‘personal accident’ insurance components are to cover your losses, damage to your car or personal injuries, disability and death, respectively.
While the above two are optional covers, third-party insurance is compulsory for all vehicle-owners as per the Motor Vehicles Act. For this reason, standalone third party insurance policies are often called ‘Act only’ insurance.
Thus, third party liability coverage is part of your basic motor policy and covers you for claims made against you by other drivers after a crash but many motorists are not aware of this, while those who are aware would not want to waste their time going for long periods of claim processes.
Mr. Adejumo Rasaq is one of Nigerians who ignorantly buy third party insurance policy without knowing that he could make a claim from his insurer to repair another person’s car in a case of an accident where he is at fault. He said: “We ignorantly buy third party motor insurance policy instead of comprehensive policy without making claims.
Though, for you to make a claim in Nigeria and get your case sorted out, it has to be a tough walk.” In most cases, he noted, one doesn’t need to start a tiring process of writing letters, getting a lawyer and going through stress over something that can be settled within a couple of minutes.
He opined that the insurance companies may have made the process of making claims so cumbersome and a strategy to frustrate the insured and make them forget about the policy, adding that Nigerians who are always in a hurry to achieve results will not want to wait and therefore making free money for the insurance companies on a yearly basis.
For him, one needs a comprehensive insurance policy to cover his own loss and for this reason, one can wait if such an incident occurs.
To a commercial bus driver, who plies the Oshodi-Ikorodu route, Marcel Oyi, most drivers, including him, buy third party motor insurance policies to escape the law enforcement agents and their constant harassment on the road. “We buy third party insurance policies to escape law enforcement agents’ trouble.
We know that is a way of dashing money to insurance companies but we can’t stop because of the police, VIO, and FRSC’s trouble. We know that they get something from that money we pay,” he said.
Chibuzor Okpala, is yet another commercial driver, who doesn’t care about his right to compensation claim but feels that the best way for him to have uninterrupted flow in his driving business is to ensure that all his vehicle papers are complete.
He argued that since he pays over N14, 000 for him to renew his motor papers yearly without refund, hence, there was no need seeking claims from his insurer, which in most cases; he doesn’t know where it comes from, as insurance brokers do the job for him.
“My own is to get the papers and go my way. I never knew I could make a claim for my third party motor insurance policy. I don’t like being disturbed when driving. I ply Lagos to Onitsha and I don’t like those police or men of the Federal Road Safety Corps (FRSC) stopping me and wasting my time. So, I try as much as I can to avoid them by ensuring that my papers are complete,” he added.
According to an insurance expert, Mr. Basil Amobi, making a third party motor claim is not easy, saying that the complex course begins with filing a report with the police and obtaining a charge sheet, which, as we all know, is a mammoth task in itself. After this, he noted, one has to approach a motor claims lawyer, who files a case in a special court, the Motor Accident Claims Tribunal as civil courts cannot decide road accident compensation claims.
“The case has to be either filed in the tribunal with jurisdiction over the area where the accident occurred or with the tribunal with jurisdiction over the area where the claimant or the defendant resides. The court then hears both sides, examines the evidence, and fixes the liability. If the decision is in your favour, you get compensated for your loss,” he added.
“Going to the insurance company for a third party insurance claim is a waste of time. Those who have comprehensive insurance policies find it difficult to get compensation in the case of an accident and how much more is the third party insurance policyholder? It doesn’t worth it.
This way, we are making money for insurance companies without claims,” said an international businessman, Igwe Godwin. However, Sunday Telegraph gathered that this three-step process is not all that simple as rules differ according to scenario and the insurance coverage that both parties have. This makes the ground reality far more complicated than what it is on paper.
Assuming your car injured a pedestrian, the insurance company will pick up the medical bills and thus save you from being torn apart by the relatives of the injured.
However, the claim you can make on an auto insurance policy is limited. For example, an auto insurance policy may only cover loss up to a certain amount say N1million. This means that if the vehicle you damaged is worth more than that, the insurance company will only provide N1million.
More importantly, as soon as the insurer thinks you are not acting ‘in good faith’ in other words, they think you are trying to rip them off, they will refuse to pay that claim, cancel your insurance, report you to the police for fraud and put you on a blacklist.
Corroborating Opkala’s position, an insurance broker, Abiola Adebowale said, though it is legally possible, insurers hardly receive cases claiming third-party compensation for only vehicle damage. People are advised to settle it out-of-court as the process is not only cumbersome but highly time consuming.
“Third party claims are filed for injury and death but settlement of these also takes a long time. On an average, in third-party claims involving bodily injury the turnaround time is one to two years. In case of death, it takes about three to four years to settle claims.
“Obviously, unless one does not have a comprehensive cover, no customer is willing to take so much trouble for a small crash that can be swiftly settled with an owndamages claim, even if it means losing out on the NCB.”
According to Barr Charles Ndukwe, in case of injury, you can claim medical expenses, compensation for physical disfigurement and also for loss of earnings if you are unable to work after the accident.
“In case of death, the dependents of the deceased can claim compensation on the basis of the income lost. Medical expenses can also be claimed for treatment of the injury that was the cause of death. For property damage, surveyor’s report, original bills from an authorised garage and motor vehicle inspection report are required to quantify the loss.
“If you are successful in your compensation claim, then you would be paid (up to the limits in the policy) by the other person’s insurer under his/her third party insurance,” he said. On the benefits of insurance policy, an insurance expert, Mr. Yemi Soladoye, said the greatest asset insurance bestows is the absolute peace in case of most traumatic moments of one’s life.
“A dying man, who is insured for life, would breathe his/her last in complete peace, knowing he/she can pass away without fretting over the financial state of his/ her family. In automobile accidents, you do not lay down in a panic attack, if the vehicle is properly insured,” Soladoye said.
However, Mr. Nwachukwu Chigbo Goodluck from Lagos says: “I have received the sum of N2, 760, 000 into my account. This being the amount paid to me by AXAMANSARD for my insurance claim on my badly damaged car. “I am happy to tell you that I am so proud to be insured by this company
. I have always believed in this insurance company. I am sharing my experience today with my family, my friends, my colleagues and to those who thought that this will never happen,” he enthused.