CHAPTER ONE 1.0 INTRODUCTION 1.1     BACKGROUND OF THE STUDY

Motor is a vehicle propelled by mechanical power other than a vehicle constructed to run on rails and includes a motor cycle.

Motor insurance is of recent origin, fire theft and liability insurance, the industrial revolution brought with it mass production of goods. This lead to the used of mechanical propel vehicles, one of which is the used of motor vehicles on the high way to move goods and passengers from one place to another.

As a result of the use of motor vehicles on the road there where so many road accidents on out Nigeria roads and many people were injured and some resulted to death. May was unable to compensate for their negligence driven, these motorists uninsured and in order to solve these problems the government enacted the road traffic act of 1930.

The road traffic act of 1930 imposed for the first time a statutory obligation on the users of all motor vehicles to provide security against their legal liability for death, bodily injury and damage caused to third-party and their properties.

The provision of security was by depositing some stated amount of money as prescribe by the law with the accountant general of the federation for third party liability. This act has been amended severally in the life of experience and this has lead to the compulsory third party insurance law in Nigeria.

The road traffic act of 1930 states as follows;

1. No person may use a motor vehicle on a road unless its use by him is covered by a policy of insurance or a security, which complies with the requirement of the act.
2. It is an offence for a person to cause or permit any other person to use a motor vehicle without the necessary insurance or security. The security being referred to is £15,000 with the accountant general of supreme court in united kingdom, and in Nigeria it is N10,000.00.

This road traffic act of 1930 was adopted by all civilized nations including Nigeria to address the liabilities to third parties for death or bodily injury on public highways.

Me road traffic act of 1930 makes it compulsory for all motorists to take out an insurance cover or security against the risk to a third party. The law intends to ensure that motor vehicle owners bear some financial responsibility for bodily injury, death or losses caused to third party due to negligence operation or driving of the motor vehicle. These help in minimizing the rate of road traffic accidents that occurs on our roads.

1.2     STATEMENT OF PROBLEM

In the absence of a full functional railway and water transport system in Nigeria today, about 90% of goods and passengers are being curried daily on our roads. This coupled with the increase in the number of case of road traffic accidents arising from changing life style and technological development, it has become necessary for the government to make motor insurance policy compulsory for all motor vehicle, owners and also to establish the federal road safety commission to handle matters relating to road traffic accidents and safety of roads.

The federal road safety commission (F’.R.S.C) was establish by the federal government in (1988). One of its objectives is the enforcement of road traffic rules and regulations, and to bring to the barest minimum the incident of road traffic accident occurrence on our road. This research work is aimed at identifying the possible causes of road traffic accidents in Nigeria and to proffer possible solutions to this trend. However, one of the major problem as contained in this research work is that about 80% of Nigeria drivers does not obey road traffic signs, therefore increases the rate of road traffic accident in our country.

Thus, observation in motor insurance business has shown that about 70% of Nigerian drivers does not have a valid driver’s license which permit them to drive on highways. These however help in increasing the rate of road traffic accidents on highways because the drivers are not qualified for driving.

1.3 PURPOSE OF THE STUDY

The following are the purpose or the objective of this research work.

1. To know the various motor insurance policies available to a driver in relation to his legal liability to third parties.
2. To critically evaluate the various covers provided under different policies of motor insurance.
3. To examine the provisions of the road traffic act of 1930 in respect of motor vehicle owners.
4. To ascertain the various causes of road traffic accident on our highways.
5. To proffer possible solution to the problem of road traffic accident in Nigeria
6. To examine the role of motor insurance in the management of this trend of road traffic accident in Nigeria.

1.4     RESEARCH QUESTION

The problem under study is centered on the following research question.

1. What is the importance of motor insurance in the management of road traffic accident in Nigeria?
2. What are the causes of road traffic accident in Nigeria
3. What are the effective ways of managing the trend of road traffic accident in Nigeria?
4. Do all motorists have an insurance policy cornering their legal liability to third party?
5. What are the effects of road traffic accident on the Nigerian economy?
6. What is the legal frame work covering motor insurance business in Nigeria?

1.5     STATEMENT OF HYPOTHESIS

For the purpose of this research work, the hypotheses below were formulated.

Ho:    Uninsured motorists do not contribute to the high rate of road traffic accident in Nigeria.

Hi:     Uninsured motorists do not contribute to the high rate of road traffic accident in Nigeria.

1.6     SIGNIFICANT OF THE STUDY

The role of insurance in the economic growth of a nation cannot be over emphasized, especially the role of motor insurance in managing the trend of road traffic accident in Nigeria. This study is meant to highlight the historical development or origin of motor insurance in Nigeria, its various policies which covers the liability of drivers towards third party injury or death resulting from the use of a motor vehicle.

The study shall also reveal some cause of road traffic accident in Nigeria and its effect on the Nigeria economy. The study shall also highlight some possible ways of managing the trend of road traffic accident in Nigeria to make the road saver for drivers and passengers.

1.7     SCOPE OF THE STUDY

This research work is meant to cover the entire Nigeria, however it. Was not possible to gather data from the entire 36 states due to lack of finance and time constraint. Thus this research work shall be limited to only three states namely, Rivers, Abia and Imo state respectively.

1.8     LIMITATION OF THE STUDY

In causes of writing this research work, the researcher was face with some difficulties which stands as a limitation or a barrier to this research work.

Lack of finance was one of the greatest problem that the researcher was faced with and this stands as an obstacle in getting related material for the writing of this research work.

Secondly, there was also the problem of limited time. Time constraints were one factor that hinders the researcher in carrying out his research work.

This is because the researcher is a student who have other academic work to attend to such as; test, assignment and examination.

However, there was also the difficulty of finding adequate literature on the subject matter of the research work.

1.9 DEFINITION OF TERMS

ACCIDENT: An unplanned event, unexpected and undersigned, which occurs suddenly and at a definite place.

BODILY INJURY: Injury to the body of the insured or a third party as a result of an accident.

DAMAGE: An injury or harm caused to the property of a third party.

HAZARD: A situation that can lead to occurrence of loss or accident.

INDEMNITY: Compensation from insurers that will put the insured to the position he was before the loss.

INSURED: A person who is covered or protected under a policy of motor insurance.

INSURER: A limited liability company or society licensed to issuer insurance policies.

MOTOR VEHICLE: A vehicle propelled by mechanical power other than a vehicle constructed to run rails and includes a motor cycle.

MOTOR PERILS: Collision, explosion, fire, theft, death and bodily injuries to third parties.

MORAL HAZARD: The character and business integrity of the insured.

NEGLIGENCE: Doing or acting without care or omission to do something which a reasonable man would not do

PEDESTRIAN: A person who is walking on the road especially in an area also used by vehicles.

PERIL: A future contingency or fortuitous accidental event that could cause a loss or damage which may be covered or excluded in a policy.

POLICY: A document containing evidence of the contract between the insurer and insured.

RISK: The uncertain tendency of financial loss occurrence.

TRAFFIC: The movement of motor vehicles along the road.