The Ghana Insurers Association in collaboration with National Insurance Commission have drawn a new Motor Tariff for the Ghanaian market. The new tariff (NIC Motor Tariff – 2010) which shall become operational 10th May 2010 is the minimum chargeable motor premium on the Ghanaian insurance market.
BACKGROUND TO THE NEW TARIFF
The current motor tariff was first introduced in 1994 by NIC and reviewed in 1999 and 2002 to become the minimum motor premium for the Ghanaian market. It was the expectation of practitioners that the tariff would be reviewed (every two years) in line with the changing economic conditions.
The new tariff, 2010, is therefore long overdue.
Besides, new statutory obligations such as contribution to the National Road Safety Act and Insurance Act 724 as well as obligations under the ECOWAS Brown Card Protocol have been imposed on the industry.
The current Tariff has been introduced with enhanced benefits to make the insuring public get value for the higher premiums they will be paying.
Some of the Benefits include
A.Loss of or Damage to Vehicles Occasioned by - flood, typhoon, hurricane, volcanic eruption, earthquake or other convulsion of nature, strikes, riots and civil commotion.
Similarly, Third Party liabilities occasioned by the above stated perils are
also admissible under the Third Party Cover.
B.Gratuitous Passengers/Members of Insured’s Household – The Private Comprehensive (X1) and the Third Party (X1) now pay full compensation for bodily injury or death to occupants of the motor vehicle other than the Insured or the person driving. In other words, gratuitous passengers including members of the Insured’s household are covered.
C.Emergency Treatment
The required premium rate is still GH¢0.30 per seat chargeable to the total number of seats. The liability limit(benefit) is however increased to GH¢60.00 per passenger to cover the first aid cost as well as the first critical (emergency) treatment/drugs necessary to stabilize the victim and/or soothe the pain before they are sent to the hospital.
It must be noted for liability to be admissible the treatment should have been administered within 48 hours after the occurrence of the accident.
E.Personal Accident Benefits
This benefit is now GH¢ 2,000.00 per victim (an increase of 400%) payable to:
Private policy- policy holder and/or person driving.
Commercial policy- driver and/or mate.
The chargeable premium shall be GH¢ 20.00 per vehicle.
Please note that the PA benefit and premium are applicable to all classes except the X4(Private Corporate vehicles) covers.
F.Third Party Property Damage Limit
The new TPPDL is GH¢ 2,000.00 However voluntary limits in excess of the basic can be requested for by the insured
ECOWAS Peril
Premiums for this risk are as shown in the tariff table. They are to cater for third party liabilities incurred whilst visiting an ECOWAS member state as enshrined in the Brown Card Protocol.
There are other statutory requirements factored into the premium charges;
National Health Insurance Levy
In line with statutory requirements enshrined in the Insurance law 2006, Act 724, all vehicles insured irrespective of their seating capacities shall be charged
GH¢0 .75 in the premium build-up.
National Road Safety Commission Levy
As a requirement of the law and in keeping with the understanding reached between NIC, GIA and NRSC an additional premium of GH¢0 .85 shall be charged.
It is interesting to note that the new tariffs will take into consideration the AGE and learning experience of the Driver; The AGE of the Vehicle and the Cubic Capacity (Engine capacity)of the vehicle.
So for starters, a private car owner will have GHC127.12 as basic premium; company vehicles used privately GHC123.88; Taxis GHC190.39; Hiring GHC190.68; Mini Buses GHC227.28; Maxi Buses GHC228.68; Motor Cycle GHC26.24; etc.All these charges are the basic charges. They do not include the other levies and charges like age of car, CC age and experience of driver etc and discounts that will come with it.
So driving a car with a TP cover suddenly became expensive...to your annoyance.
The good news here is that comprehensively insured vehicles will attract lower premiums under the new tariff with Private cars having a drop in their rate from 6% to 5% and Pick ups used to carry the owners' own goods from 7% to 4%
The question after all this is done is simple,"Will we get value for our money?"
After digesting this bit of info i feel it is a very good reform considering the peanut insureds are paying currently and still defaulting payment.
ReplyDeleteThe TPPD could have been better than GHc 2,000.00 what do you think.
Do we however have to do in one day what we ought to hv done in 10 ten years poco a poco? We do not have to surprise the consuming public in this manner.
Insurance companies lets embrace this reform with all the decency its deserves to enable us gather the needed premiums to pay claims as and when they arrise. This is not an opportunity to undercut.
Ghana and industry needs this reform to impart positively on Ghana's development.
Selina Sappor,
05/04/2010
Selina Makes a very valid argument here. And going forward, I think the regulating body (NIC) has to be a little more strict in ensuring that undercutting is checked esp. in the face of these new tariff and bring offending companies to book. Then they must also ensure that insureds get the value of the money paid in the form of quality services they are rendered.
ReplyDeletePG!
Am i hearing it right, has the increment been suspended for inadequate awareness and practicality. Are we joking or what. So we didn't create enough awareness? Tell me something.........
ReplyDeleteLina
for sure! this is Ghana for you; and NIC at their best. We take everything for granted. Can you imagine. I wonder how they got the NHIS and NRSC stuff into the computation if they did not consult the Government. And if they consulted the government, why is it being suspended by the Government now?
ReplyDeleteAs for the awareness, its a major league problem. Not enough at all. You call clients to do renewals and all you get is rage and total ignorance on the new tariff.
You don't make such major changes in your bedroom while major stakeholders roam out there. You involve them. Look at Premium payment under current tariff and the hell we are going thru as an industry. The last thing you want is to do something that will pit the government against you and in favour of the Insured. It will be difficult to implement it and then expect them to pay the correspondent premium.
We more or less have shot ourselves in the foot.
But let us see what happens! It must take off or we will suffer as an industry. It must be implemented!
PG