MOTOR INSURANCE

Motor vehicle is an invention which has made daily commuting easy. It is convenient, fast and saves time. Although, it may be easy to on a vehicle, it is expensive to maintain especially in the case of damage caused to it due to some unavoidable accidents or accidents caused by the vehicle to road users, who may be injured or die, with grave financial consequences resulting in legal damages to be paid to the beneficiaries. In many situations, the victims of these motor accidents, even when courts might have asked the motorist to pay certain sum as compensation, were unable to receive such reward because the motorist was without adequate funds. This led, to many public outrages, and a solution had to be found. The only sensible solution was to make compulsory for every motorist to be insured so as to ensure that the victims of motor accidents obtained adequate compensation in appropriate case.

Historically, Motor Insurance in Nigeria can be traced back to when the British government made motor vehicle insurance compulsory in 1930 when the number of vehicles on the road increased tremendously and was causing death, injury to pedestrians and other road users despite all the precautionary measures put in place, and Nigeria being a colony of the British government in 1945 enacted the Motor Vehicles (Third Party Insurance) Ordinance (Act), 1945. The 1945 Act makes motor insurance policy against third party risks compulsory by providing that, “No person shall use or cause or permit any other person to use a motor vehicle unless there is in force relation to the use of that motor vehicle by such person or such other person as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the provisions of this Act”.

INS 215: Motor Insurance 1 is an ND II Full-Time and ND II Yr II Part-Time two (2) units core course for undergraduate students undergoing Insurance Programmes. The course consists of fourteen (14) substantive and relevant topics. The present textbook for the course is written by Mr. Rafiu Salam and it has been developed to suit undergraduate students of Federal Polytechnic Offa, and other higher institutions of learning, and even post graduate students undergoing insurance as a discipline in any institutions by adopting an approach that highlights the key areas of motor insurance.

Student who successfully completes the course will surely develop a positive attitude and deep understanding of motor insurance underwriting. Students are required to avail themselves of the opportunities that abound in modern libraries such as the Internet, E-mail and some current collections of textbooks on motor insurance. 

This course guide briefly explains to students what the course is all about, the course materials to will be used, and how students are expected to cover the course. There will be regular lecture classes that are linked to the course and students are advised to attend the sessions. 

COURSE OUTLINE OF MOTOR INSURANCE

1. HISTORY OF MOTOR INSURANCE

• Motor vehicle invention

• Types of Motor Vehicles

• Causes of Road Traffic Accidents

• Early Stages of Motor Insurance

• Importance of Motor Insurance

2. MOTOR INSURANCE LEGISLATION

• Motor Insurance Legislation

• UK Legislation

• British RTA 1930

• 3rd Parties (Right Against Insurers) Act of 1930

• Law Reform (Contributory Negligence) Act of 1945

• Motor Insurers Bureau

• Nigeria Legislation

• Motor Vehicle Act of 1945 

• Insurance Act 2001

3. FORMATION OF A MOTOR INSURANCE CONTRACT

• Offer and Acceptance

• Consideration

• Legal Capacity to Contract

• Legality of the Contract

• Consensus ad idem

4. DOCUMENTS USED IN MOTOR INSURANCE

• Proposal Form

• Cover Notes

• Motor Insurance Certificate

• Policy Forms

• Renewal Notice

• Endorsement

5. TYPES OF MOTOR INSURANCE COVER

• Act Only

• 3rd Party Only Cover

• 3rd Party Fire and Theft Cover

• Comprehensive Cover

• Classification of Motor Insurance busines

6. PRINCIPLES OF INSURANCE AS APPLIED TO MOTOR INSURANCE

• Insurable Interest

• Utmost Good faith

• Proximate Cause

• Indeminity

• Contribution

• Subrogation

7. MOTOR INSURANCE TARIFF, UNDERWRITING AND RATING 

• Tariff

• Non-Tariff

• Underwriting

• Underwriting Factors

• Rating

• Rating Factors

• Measures Used in Treating Substandard Risks.

8. REINSURANCE OF MOTOR INSURANCE BUSINESS

• Parties to Reinsurance Contract

• Difference between Coinsurance and Reinsurance

• Basic Forms of Reinsurance

• Basic Types of Reinsurance

• Reinsurance Protection of Motor Insurance Account.

9. CLAIMS IN MOTOR INSURANCE

• Claims Procedure

• Step Involved in the Procedure

• Types of Claims in Motor Insurance

• Other Claims Matters

10. INTERMEDIARIES

• Types of Insurance Intermediaries

• Insurance Agents

• Duties of a Motor Insurance Agent

• Motor Insurance Broker

• Functions of a Motor Insurance Broker

• Dual Role of a Motor Insurance Broker

• The Motor Insurance Broker as an Agent of the Proposer/Insured

• The Motor Insurance Broker as an Agent of the Insurer

11. AGENCIES IN SUPPORT OF MOTOR INSURANCE ADMINISTRATION IN NIGERIA

• Legal Aid Council of Nigeria

• OSCAR

• NAICOM

• MAVICS

• NIA

• NIID

• Ecowas Brown Card Scheme

12. MOTOR TAKAFUL

• Motor Takaful

• Types of Cover Under Takaful

• Exclusions

• Extensions

• Conditions

• Other Matters  

RELEVANT LINKS FOR MOTOR INSURANCE  

1. Nigeria Insurance Industry Database (NIID)
2. Legal Aid Council of Nigeria (LCAN)
3. National Insurance Commission (NAICOM) 
4. Nigeria Insurers Association (NIA)
5. Nigerian Council of Registered Insurance Brokers (NCRIB) 
6. Ecowas Brown Card Scheme 

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