I was returning from the Nigerian Council of Registered Insurance Brokers Annual CEO Conference when we ran into traffic after the Redeemed Camp. Heavy traffic around that stretch of Lagos-Ibadan Expressway has become a common occurrence, so I prepared myself for the inevitable. A short while later I noticed billows of smoke on the other side of the road. By the time we got there, a salon car was on fire. It had apparently hit the rear of the vehicle in front of it because the rear of another vehicle nearby was damaged.
Unless it was a mob action, the vehicle caught fire after the accident. “Double jeopardy” was what came to my mind. Many vehicles like the type on fire hardly buy comprehensive insurance; the owners usually go for Motor (Third Party) Insurance, both fake and genuine. The implication here is that if the third party insurance it has is fake, he is on his own through and through. He has to look for money to fix the vehicle he damaged and look for money to replace his own vehicle.
But if he has a genuine Motor (Third Party) Insurance, his problems are reduced. He still has to look for money to replace his car, but the insurance company that issued his Motor (Third Party) Insurance will be responsible for the repairs of the third party vehicle to the tune of N1 million. The damage I saw will not take up to N1m to fix, so he will be fine. But if he had hit a luxury vehicle, he would have been in big trouble because the rear lights and bumpers alone could cost as much as N2 million to replace. Then there is body work and spraying. Some third parties refuse any form of body work on their luxury vehicle. They insist the damaged portions should be replaced, while the entire vehicle rather than only the damaged portions should be sprayed to maintain uniformity of colours. In such a scenario, you are looking at expenditures of N3 million upwards. Meanwhile, the guilty party can only get N1 million from his insurers; he now has to source the additional sum to repair the third party vehicle.
But if the third party vehicle is comprehensively insured, the owner usually opts to go to his insurance company to get his vehicle fixed. He will provide his insurers the details of the guilty party. The insurance company has the option of pursuing subrogation rights against the negligent party. Subrogation is the legal principle where the insured surrenders his rights against a third party to his insurance company after claiming and receiving compensation for the insured loss. The insurance company now sues the negligent third party, but in the name of the insured, to recoup what it has paid the insured. In theory, the insurance company can only commence legal proceedings against the third party after compensating the insured. But in practice, legal proceedings do go on simultaneously with the processing of the claim. But often, insurance companies waive this right, especially if the amount in question is small or where the negligent third party is too poor to pay the sum.
Another scenario is if the negligent party has Third Party, Fire and Theft Insurance; he will be fully covered in this case. His insurers will fix the third party vehicle and also compensate him for the loss of his vehicle that has been totally damaged by fire. But if the vehicle had been merely damaged as a result of the accident and there was no fire, the insured would have been responsible for fixing his own vehicle, because TPF&T, as we explained some time ago, covers only third party liabilities (for bodily injuries, death and property damage), damage to the vehicle by fire and theft of the vehicle. It does not cover own damage caused by collision.
But if the owner of the vehicle has a comprehensive Motor Insurance, he will go to sleep because the damaged third party vehicle will be fixed and his own vehicle will be replaced. The only deduction that would apply is excess. As we have explained several times here, excess is the portion of each and every claim that a policy holder bears. It is usually expressed in percentage or figure. It is a feature of all indemnity policies. However, unlike other insurances, excess in motor can be bought back usually at between 0.5 to 1% of the sum insured of the vehicle.
Another issue I want us to look at here is how did the vehicle get engulfed in flame? By the time we got there, the two vehicles had been taken off the road. So there was probably no fire explosion and there must have been enough time to put out the fire before the whole vehicle was engulfed. The fire started like a candle light. It is likely none of the two vehicles had a functional fire extinguisher. This brings to fore the importance of fire extinguishers. Many motorists only have fire extinguishers to show road safety officials on the road. Please note that policemen are not supposed to request for fire extinguishers when they check your papers. Past inspectors general of police have always insisted that policemen on the road are only enjoined to ask for driver’s license, vehicle license and insurance certificate. Anyway, all motorists must learn to carry functional fire extinguishers. Fire extinguishers are meant to be serviced periodically. Not doing that is like not having any. It is penny wise, pound foolish.
Finally, there is a sight that irritates me on our roads. You get to a scene of an accident and see someone lying on the ground begging. What for? If you are the guilty party, simply apologise and provide the details of your insurance broker to the other party. Your insurance broker will take it from there. Even with a Motor (Third Party) Insurance that you got with a premium of N5,000 (private vehicles), you are covered to the tune of N1 million for third party property damage. Sometimes, the damage they are lying on the ground for will not take N200,000 to fix!