INDIFFERENCE AND INFORMAL INSURANCE: ANALYZING STATUTORY MOTOR VEHICLE THIRD-PARTY INSURANCE UPTAKE AND FINANCIAL REMEDIATION IN SOUTH EAST NIGERIA

Abstract

This study investigated vulnerable motorists’ indifference towards the statutory motor vehicle (third party liability) insurance uptake and their financial remediation, as enshrined under part X, section 84-102 of the Nigerian Insurance industry Reform act, 2025, within South East Nigeria. The aim is to examine critical factors as contained ‘Insurer-Road User Value Proposition’ which led motorists to patronize fake or informal third party insurance other than the statutory compulsory coverage. The study specific objectives were to ascertain whether (i) incentivized education and (ii) socio-cultural beliefs have influence on the motorist third party insurance uptake and their sustainable financial remediation. The study adopted a cross sectional research design. The population consisted of all category of motorists aged 15-85, including accident victims. Data were obtained using a structured open-ended questionnaire. The sample size was 400 persons. A reliability coefficient of 0.805 was obtained using the Cronbach’s alpha interval consistency statistics. Descriptive and inferential statistics were used in analyzing the data. The ordinal logistic regression, Z-test, and chi-square were applied testing the hypothesis at 0.05% level of significance. Findings showed that, incentivized education and socio-cultural beliefs have significant positive influence on vulnerable motorist third party insurance uptake and sustainable financial remediation. Z-test results for null hypotheses 1 and 2 regarding the role of incentivized education, and cultural factors in insurance uptake and remediation yielded (Z= 6.852, P <0.05); (Z=7.168, P <0.05). This implied that insurance incentivized education and cultural factors have bearing on insurance uptake and sustainable financial remediation. Based on these findings, it was concluded that motorists in South East of Nigeria are not indifferent in the uptake and utilization of the statutory motor third party insurance as required by law, but are dissuaded by the low level of incentivized education and socio-cultural beliefs. There is thus the need for insurers to embark on high end marketing, backed by incentivized educational awareness, cultural reorientation towards motorists increased motor third party liability insurance uptake and utilization in South East Nigeria.