Experts in the nation’s insurance industry have advised Nigerians to patronise duly licensed insurance brokers for professional counselling and value auxiliary services in buying insurance products.
The Chairman, Boff & Company Insurance Brokers Limited, Babajide Olatunde-Agbeja, gave the advice during a workshop in Lagos. Saying prospective buyers stand to gain greater benefits from policies by dealing with a broker rather than dealing directly with the insurance companies.
He argued that due to the complex nature of insurance contracts, prospects are served better brokers who understand the nitty-gritty nature of the business. An insurance broker ensures that a comprehensive analysis of the prospect’s individual or business risk is carried out to identify the insurance needs and advise accordingly.
Agbeja said: “For any individual or corporate body to enjoy the maximum benefit in the insurance value chain, they need to engage the service of insurance brokers who are professional consultants focused on providing optimum guidance to them.
“The insurance broker understands the rudiments of insurance, and as such would sit with a prospect, debrief the prospect, understand what exactly his business is about and how it operates and then provide a report on the possible insurance policy or policies needs of the prospect’s business and how best to buy them.
Industry’s observer, who spoke on the benefit of engaging registered brokers when customers need a policy or to get claims from insurers, said that low awareness on the benefits of N5,000 third party motor insurance policy has denied many motorists about N1 million third party claims, With N5,000 yearly motor insurance premium, a motorist can actually claim N1million third party damages.
Of the 12 million vehicles on Nigerian roads, about 8.6million are uninsured while the remaining 3.4 million were insured.
However, out of the 3.4million insured vehicles, it is believed that about 2million carries a third party motor insurance policy being sold at N5,000 while the remaining 1.4million have a comprehensive motor Insurance policy which is sold at between 5 to 10 per cent of the cost of a vehicle.
Third-Party motor insurance covers the insured’s liability for death/injury to Third Party and loss or damage to third-party property in the event of vehicular accidents.
While it is one of the compulsory insurance policies in Nigeria, it is the legal minimum level of motor insurance cover any motor vehicle owner plying the Nigerian roads is required to have by law.
Investigation shows that the policy takes care of the damage caused by the insured to the Third Party’s property or vehicle, as well as the Third Party’s medical expenses (if any) in the event of an accident when the policyholder is at fault.
To this end, it covers accidental damage to the property or vehicle of a Third Party of up to an N1million as this form of insurance is expected to reduce dispute on who bears repair costs in the scene of an accident between two or more vehicle drivers.
However, low awareness of the benefits of this form of insurance has resulted in most motorists repairing the damaged vehicles of the third parties involved in an accident from their pockets, when indeed the policy they carry covers that.
Investigation and interviews conducted among, especially, public transporters, show that only a few of them, understand that they can lodge a claim on the policy they bought, even as some have never had any insurance policy.
They said, they always settled out with motorists involved from their own pocket and if they don’t have the money, they begged the victim motorist and engage in fights.
They believe the certificate is just an ordinary paper that prevents them from the wrath of the law enforcement agencies on the roads.
To see the level of awareness on third party motor insurance, some motorists were surprised their third party policy can do so much for them, yet, they were not aware of that.
According to a Lagos public transporter, Austin Akpan, “I am not aware that I should receive claims when being involved in an accident. This is the first time am hearing it even though my insurance is up-to-date. I have always renewed my insurance certificates, yet, I have never lodged any claim in this regard.