1. Introduction Motor insurance claims disputes still remain a major cause of litigation in the insurance industry today. One reason is the mandatory nature of motor insurance. Section 68(1) of the Insurance Act 2003 requires every motor user to have compulsory third party motor insurance. Section 68(3) states that the third party motor insurance shall also be regulated by the Motor Vehicle (Third Party) Insurance Act 1950. 2. Limits of liability Section 68(2) of the Insurance Act imposes a lower limit of N1m for material damage liability and an insurer is at liberty to impose a maximum limit of liability for material damage. Section 69(1)(b) of the Insurance Act 2003 is similar to section 10(1) of the Motor Vehicle (Third Party Insurance) Act 1950 and both sections impose a statutory duty (not a contractual liability) on an insurer to settle the amount of any judgment obtained by a third party claimant against an insured. This means that an insurer cannot place a maximum limit of liability for death or personal injury to third parties. See Lawfields Insurance Advisory No.1. 3. Claims Notification & Investigation 3.1 Generally insurance policies require that on the occurrence of any accident or loss prompt notice should be given to the insurer. The purpose of such notification is to allow the insurer take control of and manage the claims process. The manner of notification may be oral or written and it may be made by the insured or through a broker. In Leadway Assurance v Zeco (2014), the Supreme Court held that in the absence of an express requirement of a written notice, an oral notification of loss was valid. This was a marine insurance case but the principle is applicable. 3.2 Where the policy requires the insured to give notice of loss promptly or immediately, then notice given several months after the accident is a breach of condition which entitles the insurer to repudiate liability. In Ejiofor v Arrowhead Insurance (1992), Iguh J said, “It is indisputable that a condition requiring an insured to give notice forthwith or an immediate notice of his loss to the insurers is of utmost importance to the insurers to enable them take immediate steps to protect their own interest.” 3.3 Once an accident is reported and a claim is made, the insured must complete an Accident Report/Claims Form provided by the insurer. The claims form is the basis of the investigation carried out by the insurer. Sometimes the information provided by the insured in the claims form is false or exaggerated. This may be discovered by the claims investigation carried out by the agents of the insurer. The question is whether or not the duty of disclosure applies to information provided in the claims form. The duty of disclosure applies at the commencement of the contract (the proposal form) or during the currency of the policy (to any warranty or condition) but not after the loss. After the loss an insurer is entitled to repudiate a fraudulent claim if the information in the Claim Form is false or exaggerated. Police report 3.4 Section 71(1) of the Insurance Act 2003 states that, in the event of a claim arising from a motor accident, it shall not be necessary to produce a police report to the insurer except in the case of death or serious bodily injury to any person. In the absence of death or serious bodily injury, a statement made by a single eyewitness involved in the accident will be sufficient proof of loss or damage. However, a police report is mandatory for claims arising from theft (stealing) or robbery of the vehicle. See section 71(3) of the Act. 4. Proper Parties to Litigation There is no statutory authority for the joinder of an insurer in an action by third party claimants against an insured. Section 69 of the Insurance Act 2003 does not give a third party claimant a legal right to join an insurer in claims against the insured. Judicial authority in Nigeria has rejected the joinder of an insurer as a co-defendant in action by a third party claimant against an insured. See, New India Insurance v Odubanjo (1971) and UBA v Achoru (1987). See Lawfields Insurance Advisory No.8. 5. Repairs or Total Loss 5.1 In the case of material damage claims the insured will either be paid the assessed cost of the damage or the damage will be repaired by the insurer. However, if the repair is not economically viable the vehicle will be declared a total loss or write off and the full sum insured will be paid less excess and depreciation. A motor insurance policy is a contract of indemnity and in the event of a total loss or write off, the measure of indemnity will not be greater than the sum insured. The insured will be paid either; (i) the market value; or (ii) the replacement cost; of a vehicle of the same model and age. 5.2 Where there is underinsurance (i.e the sum insured is less than the market value of the vehicle) the insurer will apply the pro rata condition of average to settle the claim. So if a vehicle is insured for 50% of the market value the insurer will not pay the entire claim but will only pay 50% of the amount. This is one area that confuses consumers of motor insurance who expect to be paid the full sum insured. Case Law 5.3 In the Ghanaian case of Asamoah v SIC Insurance (2018), the insured inflated the cost of the vehicle and the sum insured when he took the policy. The vehicle was involved in an accident and became a total loss. The insurer relied on breach of the duty of disclosure and repudiated the claim on the grounds that the value of the vehicle was inflated at the inception of the contract. The Supreme Court held that an insurer cannot avoid a claim based on an inflated sum insured and ordered SIC to pay the full sum insured for the total loss claim. In my humble opinion this decision was made in error because it violated the principle of indemnity that an insured cannot recover more than his actual loss. 5.4 The insurer must carry out the repairs within a reasonable time or may be liable for damages. In Niger Insurance v Abed Brothers (1976), the Supreme Court held that the failure of an insurer to repair a vehicle within a reasonable time was a fundamental breach of contract which denied the insurer from relying on any clause limiting their liability for damages. 5.5 In Nicholas Brothers v Lion of Africa Insurance (1961), the insured was dissatisfied with the repairs carried by the insurer on the damaged vehicle. The High Court held that the insured was entitled to recover the full pre-accident value of the vehicle as the insurer had failed to discharge their obligation to restore the vehicle to the pre-accident condition. Udo Udoma J said, “It is clear on the authorities cited above that when the defendants exercised their option to repair and reinstate the car in question, they understood to make good the damage done so as to leave the car so far as possible as though it had not been damaged.” 6. Proof of Negligence: Determination of Fault In many cases the third party may commence litigation to recover damages against the insured. In such cases the third party must prove that the negligence of the insured caused the accident. In Abubakar v Joseph, (2008) 8 MJSC 1 at 26, Tobi JSC said, “In cases of motor accidents the test to be applied in determining who was negligent is to look for the person whose negligence substantially caused the accident by determining whether or not that person could have avoided the collision by the exercise of reasonable care. See, Otaru & Sons v Idris (1999) NWLR (pt.606) 330.” See also, Ngilari v Mothercat Ltd (1999) NWLR (pt.636) 626, 7. Claims Repudiation 7.1 There are several grounds upon which a claim can be repudiated. Some of them are; (i) where the cover was not in force at the time of the loss (premium was not paid); (ii) where the loss was not covered by the policy (the loss was excluded or excepted); (iii) where there was breach of a warranty or condition; (iv) where the insured failed to disclose material facts; or (v) where the insured make a fraudulent claim. Cost of Car Hire: Loss of Use 7.2 In Mercury Assurance v Anozie (1977), the Court of Appeal held that an insurer cannot be liable for the cost of car hire (consequential loss) after an accident unless it was expressly covered by the policy. Aseme JCA said, “Consequential loss or loss of use has been defined by Shawcross to refer to loss which the assured sustains as the user of the vehicle during the same time that it is out of action as a consequence of the damage covered by the policy which loss would not be covered unless the policy expressly extended to it.” 7.3 The 3rd party is expected to repair the damaged vehicle within reasonable time and mitigate the loss and any excessive claims against the insured will be dismissed. In Obasuyi v Business Ventures (2000) NWLR (pt.658) 668 at 683, Belgore JSC said, “In cases of this nature, it is always expected of a plaintiff to mitigate the loss suffered due to negligence of the defendant. It is incumbent to get such damaged vehicles repaired at the earliest opportunity. This is the requirement of the law all over the world. To allow a party that is a victim of negligence time almost in perpetuity to leave his damaged object unrepaired and expect damages to be calculated against years rather than a few days is giving a blank cheque to rake underserved compensation.” Breach of Tracker warranty 7.4 In the event of theft of the vehicle and where the insured was in breach of the tracking warranty by failing to keep the tracking device in good working order the insurer can repudiate the claim. Furthermore, there is a standard policy condition that the insured must take reasonable steps to safeguard or protect the vehicle from loss or damage. Also, the insured will breach the duty of disclosure by failing to disclose that the tracking device had stopped working. Fraudulent Claims 7.5 The settled law is that an insurer can repudiate a fraudulent claim where; (a) the entire claim was fabricated; or (b) there was a genuine claim but the amount of the claim was dishonestly exaggerated. Section 55(2) of the Insurance Act 2003 states that, where there is a breach of any term of the contract of insurance, the insurer can repudiate the whole or any part of the contract or any claim where the breach amounts to fraud. In Versloot Dredging v HDI GerlingIndustrieVersicherung AG. (2016), the Supreme Court of England held that the fraudulent claims rule applies to a wholly fabricated claim or an exaggerated claim but does not apply to a justified claim supported by collateral lies. Jide Bodede 08035130694