In Nigeria, third-party motor insurance is not only a legal requirement but also offers substantial financial protection that many motorists may not fully appreciate. For an annual premium of ₦15,000, private car owners receive coverage of up to ₦3 million for damages caused to third-party property in the event of an accident.
Understanding Third-Party Motor Insurance
Third-party motor insurance is the minimum coverage mandated by Nigerian law for all vehicles on public roads. This policy covers liabilities arising from damages or injuries inflicted on third parties due to the insured vehicle’s involvement in an accident. It’s important to note that this insurance does not cover damages to the policyholder’s own vehicle.
Key Benefits of Third-Party Motor Insurance
1. Financial Protection Against Third-Party Property Damage: The policy provides coverage of up to ₦3 million for repairing or replacing third-party property damaged in an accident involving the insured vehicle.
2. Coverage for Bodily Injury or Death: In the unfortunate event that an accident results in injury or death to a third party, the insurance covers medical expenses and provides financial compensation to the affected individuals or their families.
3. Legal Compliance: Possessing valid third-party motor insurance ensures adherence to Nigerian traffic laws, thereby avoiding penalties or fines during enforcement exercises.
Recent Developments and Enforcement
As of February 1, 2025, the Nigeria Police Force, in collaboration with the National Insurance Commission (NAICOM), has intensified the enforcement of the mandatory third-party motor insurance policy nationwide. This initiative aims to reduce the number of uninsured vehicles on the roads and ensure that victims of accidents receive appropriate compensation.
Challenges and Public Awareness
Despite the clear benefits, a significant number of Nigerian motorists remain unaware of the extent of coverage provided by third-party motor insurance. This lack of awareness contributes to widespread non-compliance and reliance on fake insurance certificates. To address this issue, NAICOM and the Federal Road Safety Corps (FRSC) have partnered to enhance public education and enforce compliance with insurance regulations.
Conclusion
Third-party motor insurance offers Nigerian motorists valuable financial protection and ensures legal compliance. By understanding and embracing the benefits of this policy, drivers can safeguard themselves against unforeseen liabilities and contribute to a more secure driving environment.
