Can Insurance Companies offer free Speed Limiting Device to policyholders?

Insurance consumers under the auspices of Insurance Consumers Association of Nigeria, INSCAN, are demanding for the inclusion of free speed limiting device in a comprehensive motor insurance cover, Vanguard Insurance has learnt. The demand is coming on the heels of directive by the Federal Road Safety Corps, FRSC, that vehicle owners should install speed limiting device on their vehicles. However, insurance operators are opposing the demand, stating that consumers should be responsible for their safety, hence should purchase the device themselves.

INSCAN’s National Technical Adviser, Mr. Yemi Soladoye, who spoke exclusively to Vanguard, noted that insurers should desist from contesting the move but embrace it because it will be more beneficial to the insurance companies. Soladoye said, “Insurance companies are still contesting the demand by consumers for free speed limiting device with our members.

But since a vehicle tracker prevents theft, speed limiting device also prevents accident. So it is also an added benefit to the insurance companies.” Opposing the position of INSCAN, Managing Director of FBN Insurance, Mr. Val Ojumah, said that insurance consumers should take responsibility for their safety on the roads and since the speed limiting device is for safety, consumers should cater for it themselves.

Ojumah said, “How much are the consumers paying as premium for comprehensive motor cover? They are paying low rates and many of them are paying premium on instalment. Value of cars have gone up, repair costs have gone up but insurance premium have not gone up rather premium have gone down. “Now consumers are saying that they want insurance premium to be reduced further by insurance companies taking responsibility for their safety and they don’t want to pay for it.

Insurance companies are running a business too. “Every year insurance premium is going down because everybody wants a lower rate. Insurance brokers are struggling among themselves using rate as a competitive tool and reducing the rate every year. But consumers should know that insurance is not just about physical damage to the vehicle, what about the safety of the occupant and members of the public? Is it the vehicle damage or the safety of lives and property that is more important? So why should consumers say that insurance companies benefit more if they offer free speed limit device to customers.

Source: Vanguard