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Uncovered: Sources of Fake Auto Insurance Certificates

By: ROTIMI ASHER (with reports from Frank Boyede and Femi Owoeye)

[dropcap]S[/dropcap]ince third-party motor insurance policy is a legal requirement in Nigeria, hardly would any motorist drive about without one. According to Section 68 of the Insurance Act and Section 3 of the Motor Vehicle (Third Party) Insurance Act, “no person shall use, or cause or permit any other person to use, a motor vehicle unless such a motor vehicle is insured against damage to the property of third parties.”

Section 68 (1) reads: “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.”

Typical fake third party insurance certificate
.Typical fake third party insurance certificate

It also stipulates that the insurance taken out pursuant to sub-section (1) of this section, shall cover liability of not less than N1 million, adding that a person who contravenes the provisions of this section commits an offence and liable on conviction to a fine of N250,000 or imprisonment for one year or both.

Unfortunately, Motoring World investigation has confirmed that what majority of Nigerian motorists hold as insurance policy certificates bare neither roots not records with any registered insurance company. In essence, they are not registered in the nation’s Central Insurance Industry database (CIID).

By implication, in case of an accident, holders can not apply for a claim. Genuine insurance costs annual premium of about N5000. On the contrary, issuers of fake ones charge N2000 to N3000, depending on state of the federation.

As a special guest at the members evening of the Nigerian Council of Registered Insurance Brokers (NCRIB) held in Lagos last year, a Lagos-based Divisional Police Officer (DPO), named Mary Ubangha, a Superintendent of Police (SP), observed that insurance industry loses huge amount of money to insurance fraud perpetrated by touts in various motor licensing and registration offices across the country.

To confirm the problem, Motoring World editorial team selected samples of hundreds of vehicle plate numbers operating in various states of the federation, including Abuja and Lagos and entered each into the CII online Database. At the end, over 70% of the numbers returned negative results, in form of a red alert: “Your Policy is not found”, implying that the vehicles of whivh registration numbers returned such results are either never insured or are being operated with fake policies.

In the course of our investigation, many holders of fake auto insurance certificates confessed to be aware, while some are not.

Mr. Chris Ikeola, an interstate commercial transporter, who plies Lagos-Akure responded: “Why?   I believe my insurance is genuine, because police has checked my papers a number of times and did not complain. More so, I usually get it with my other vehicle documents from licensing office. I don’t visit touts.” But when entered into the CII Database, Mr. Ikeola’s plate number returned negative result.

A Lagos taxi driver, who spoke anonymously, believes his insurance is not genuine. But to him, it is an acceptable norm in Nigeria: “A beg, leave that!” he snapped. “Even police know, but they will not disturb anyone, because insurance companies only use third party to make money. If you make mistake of paying N5000 and have accident and attempt to claim, you can never meet their conditions. They will frustrate you. Like me, I cannot afford to leave my car for three months chasing insurance case.  Why not do the N2000 one and avoid police trouble? A beg! No be Nigeria we dey? (Excuse me, are we not in Nigeria?)”

Like the Taxi driver, majority of motorists who responded to us blamed insurance companies for the problem, alleging that third party insurance policy in Nigeria is fraud.

SP Ubangha, who attributed the problem to impatience among Nigerians, advised that government should make a stronger law criminalising fake insurance certificate against buying and selling.

Whereas, Mr. Manny Phillipson, CEO Media Advocate Limited, called for suspension of third party insurance policy.

“I advise that government, if possible, should outrightly suspend all what they call third party insurance policy in Nigeria,” he said. “If you can’t insure your vehicle comprehensively, you may as well not use a vehicle. Imagine, a lot of motorists only see the third-party insurance policy as Police-let-me-go. Many don’t even know the essence of taking up a third party insurance policy.

“For instance, you would see some of them, who supposedly have third party insurance policy, when they ram into another person’s car, knowingly or unknowingly, the next thing the driver does is to come to the victim and prostrate flat, begging. Sometimes, I ask this question: ‘Why beg, if the vehicle is truly insured?’” Mr. Phillipson also blamed insurance companies for what he described as conducts that encourages motorists to make do with fake auto insurance policies.

Christian Wiesner, Co-founder/Managing Director, TOPCHECK Insurance
Christian Wiesner, Co-founder/Managing Director, TOPCHECK Insurance

“There is so much fraud in the insurance industry,” he alleged, adding, “Because, in the first place, they don’t incur liabilities. So what is the purpose of collecting N5000 annually from motorists?”

Christian Wiesner, Co-founder/Managing Director, TOPCHECK Insurance, told Motoring World in an exclusive interview, that his company started business in Nigeria to be a solution to the problem of bureaucracies, lack of transparencies and painful experiences that insurance buyers pass through across the country.

We understand that for an insurance buyer to get the best deal from reputable insurers,” he explained, “best thing is to be able to compare dozens of registered companies in the market, which is why we work with the best insurance companies nationwide to provide the solution that best fits insurance customers’ needs.

“Why visiting licensing office to apply for an insurance policy, when you could easily log on to the web, search and compare reputable insurance companies and register for a policy that fits your bill and circumstance?

“When Nigerians are looking for new policies, they can visit our site, via the Home page of Motoring World International(https://motoringworldng.com) and see different car policies that they want. The policies can also be accessed through mobile phones. And once you register for your insurance policy through our website, the data is registered with the CII online Database, which is why you receive an alert on your registered mobile phone. And if it is a reputable insurance company, you shall fill the forms yourself, read all the dos and don’ts. With that, your indemnity cannot be delayed, since you know the terms and conditions of your insurance policy, unlike the one somebody supposedly does on your behalf and simply hand over to you an unverified certificate.”

Sources of Fake Insurance Certificates

Motoring World discovered that many motorists ignorantly procure fake insurance from States Vehicle Licensing Offices( Inland revenue) across the country. Our enquiries to a number of Inland Revenue Offices in Lagos, Ogun, Oyo and Ekiti states of Nigeria revealed that staffers on duty offer to process for motorists, auto insurance policies in addition to road tax and certificate of roadworthiness. And, because they are government officials, many motorists trust them and, ignorantly, pay for fake policies.

Upon visiting Inland Revenue office, Ojodu, in Lagos, for instance, our correspondents found touts hanging around, asking if the type of insurance a visiting motorist wants to do is police-let-me-go (Fake) or AUTOREG(Genuine). Many of such motorists opt for the fake ones, because they cost about half of the price of genuine ones. Touts, who act as if they are staffers, would normally cajole unsuspecting motorists that “both are genuine, but the only difference is that motorist would receive alert for buying the most expensive one,” which is untrue.

At the Old Governors office in Ekiti State, for instance, touts also hang around the State Inland Revenue office, where FRSC office is also situated, just like Ojodu in Lagos. However, unlike Lagos and Ogun State, touts would not speak to motorists unless asked for a direction, after which they would offer to handle the process on his or her behalf. When a motorist approaches a staff behind the counter for purchase of road tax, the former would normally tell motorists he or she handles insurance also.

Over 90% of insurance certificates processed by such licensing officers, we gathered, are fake. For those staffers, we found out, are not dealing with any genuine insurance company but with an insider or outsider, who prints forged and fake insurance certificates, supplied to the Inland Revenue office staff. For instance, an Ado-Ekiti indigene, and staff of Ekiti State Hospital (name withheld) and a number of other Ado-Ekiti residents, told Motoring World correspondent that maker of fake third party auto insurance in the state capital is one man popularly called Alhaji. We found out similar modus operandi in Oyo State, Osun State, Ogun State, Lagos and the FCT.  And most of the time, the insurance certificates made for unsuspecting motorists are forged version of registered insurance companies’.

However, the problem is less prevalent in Lagos and Abuja, compared to the rest of the country. About 70% of the number of vehicles sampled in Lagos State are either uninsured or have fake insurance registration. When their registration numbers were searched on the Nigerian Insurance Industry database(NIID) Portal, response we received was:” Your Policy is not found!!!” an indication of  lack of insurance at all or driving about with fake insurance policy, popularly referred to as “Police-let-me-go”.

Whereas in Oyo, and Ekiti States, data of more than 90% of sampled vehicles registered in each of the states were, as at the time of putting this report together, not found in the NIID portal.

Getting Genuine Auto Insurance

In Lagos State, where AUTOREG insurance policy is done, when a motorist gets to Licensing office, for instance at Ojodu, genuine e auto insurance policies, known as AUTOREG, costs N5,000. While fake ones costs N2000 to N3000. If what a motorist has done is genuine, he or she will receive a text alert on his or her phone few hours afterwards. And when it is about to expire, he or she will be alerted again.

If a motorist does genuine auto insurance once and does fake one the following year, it would be recorded in the National Central insurance databank that the motorist failed to insure the previous year. If he or she carries police-let-me-go for three years before going back to do a genuine one, such motorist will be charged premium for all the years for which he or she had operated with fake insurance certificate.

Unfortunately, the Nigerian police and FRSC Marshals, who normally mount roadblocks and check motorists’ vehicle particulars, hardly check genuine insurance certificates. The only body with equipment to check fake insurance policies are the VIOs in Lagos and Abuja.

Implication of running a vehicle without a genuine insurance policy is that whenever there is an accident, motorists usually take law into their own hands, instead of turning to an insurance company for indemnity. At the end, when conflicting motorists reach an agreement, whoever is guilty pays for repair or takes the car to a garage and get the repair done out of his or her own wallet. And the N2000 or N3000 paid for fake insurance is just wasted.

On the other side of the coin, few motorists, with genuine insurance certificates painted a rather gloomy picture of their experiences, whenever they have claims to make.

“It’s worse than a camel’s passage thorough the eye of a needle,” said Mr. Gbenga Oshin, a Civil Engineer, who drives a Nissan Pathfinder with Lagos state registration number. “Last time I had a cause to make a claim from an insurance company, with my second car, the company made it absolutely impossible for me. All the conditions they brought up I never knew about. They needed a witness, which I could not find. So when you look at it, you won’t blame those who rather do police-let-me-go for N2000 rather than pay N5000 for what you can never claim.”

While majority of commercial and private motorists described approaching insurance companies for indemnity as a waste of time, Mr. Bode Akinsete, a Teacher, who owns a Toyota Camry, rather perceive vehicle insurance as a document meant for avoiding what he described as policy embarrassment.

“Look,” he stressed, “vehicle insurance policy certificate in Nigeria is meant to avoid being disturbed by the police, which is why it is popularly referred to as police-let-me-go. Police don’t even know the difference.”

What the entire scenario indicates is that even the law enforcement agents are aware of the enormity of the problem. But, aside from VIOs, who once in a while spot-check vehicles, and make very few arrests, regular police on the highway do not even check commercial vehicles particulars. Instead, with impunity, they concentrate on collection of the embarrassing N50 toll, an action, which has tarnished Nigerian image for decades. Officials of the Federal Road Safety Commission (FRSC) are also aware of the problem. But they concentrate more on driving licences and other safety-related auto accessories.

The law forbids driving with fake insurance policies. Unless the law enforcement agencies start combing through crops of insurance certificates carried by motorists across the federation, there might be no end in sight for the problem.


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