The Nigeria Police Force has begun the enforcement of third-party motor insurance for all vehicle owners, effective February 1, 2025. This move aims to improve road safety, reduce uninsured vehicles, and ensure accident victims receive financial compensation.
For Nigerian car owners, understanding this policy is crucial to avoid penalties, stay legally compliant, and enjoy financial protection. This article provides everything you need to know about third-party insurance, including its benefits, penalties for non-compliance, and how to get a valid policy.
What is Third-Party Insurance?
Third-party insurance is a mandatory vehicle insurance policy that provides coverage for damages, injuries, or losses caused by your vehicle to another person, car, or property. However, it does not cover:
- Damage to your own vehicle
- Personal injuries sustained by the policyholder
- Theft, fire, or vandalism
Despite these limitations, third-party insurance is a legal requirement in Nigeria and remains the most affordable form of motor insurance.
What Does Third-Party Insurance Cover?
| Coverage | Details |
|---|---|
| Property Damage | Covers damage to another person’s car, house, or property caused by your vehicle. |
| Bodily Injury | Covers medical expenses or compensation for injuries caused to third parties. |
| Legal Liabilities | Covers legal expenses if the third party sues you for damages. |
Legal Basis for Third-Party Insurance
Third-party insurance is mandatory under Nigerian law, governed by:
- Section 68 of the Insurance Act
- The Motor Vehicle (Third Party Insurance) Act of 1945
Without this insurance, driving on public roads in Nigeria is illegal and punishable by fines or other legal actions.
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Why is the Nigeria Police Enforcing Third-Party Insurance?
Although third-party insurance has always been a legal requirement, compliance levels have been low. Many vehicle owners either fail to obtain insurance or purchase fake policies, leaving accident victims without compensation.
Key Reasons for the Enforcement:
- Reduce Uninsured Vehicles: Many drivers do not have insurance, making compensation difficult in accidents.
- Ensure Financial Protection: Insurance ensures accident victims receive proper compensation.
- Improve Law Compliance: The Nigeria Police and the National Insurance Commission (NAICOM) are working together to ensure compliance and eliminate fake insurance policies.
Penalties for Driving Without Third-Party Insurance
If caught driving without valid third-party insurance, you could face:
| Offense | Penalty |
|---|---|
| No third-party insurance | Fine up to ₦50,000 or vehicle impoundment |
| Fake or expired insurance | Possible imprisonment and additional fines |
| Involvement in an accident without insurance | Full personal liability for all damages and medical expenses |
To avoid legal trouble, vehicle owners must obtain valid third-party insurance from licensed insurers.
Benefits of Having Third-Party Insurance
Many Nigerian drivers overlook insurance until they face an accident. However, third-party insurance offers several benefits:
1. Legal Compliance
Having third-party insurance ensures you meet Nigerian legal requirements, preventing fines, police harassment, or legal action.
2. Financial Protection
If you cause an accident, your insurance policy covers the cost of damages and medical expenses for the third party, preventing out-of-pocket expenses.
3. Peace of Mind
Knowing that you are financially covered allows you to drive with confidence, without worrying about sudden liabilities or legal issues.
4. Avoid Police Harassment
With a valid insurance certificate, you can avoid unnecessary police stops, bribes, or harassment on Nigerian roads.
How to Get a Third-Party Insurance Policy in Nigeria
Obtaining third-party insurance is simple and affordable. Follow these steps:
Step 1: Choose a Registered Insurance Provider
Only buy insurance from licensed insurance companies registered with NAICOM. Some reputable insurers in Nigeria include:
- AIICO Insurance
- Leadway Assurance
- AXA Mansard
- Mutual Benefits Assurance
Step 2: Provide Vehicle Information
Most insurance companies require:
- Vehicle registration number
- Make and model of the car
- Year of manufacture
- Owner’s personal details (name, phone number, email, and address)
Step 3: Pay the Insurance Premium
Third-party insurance is affordable, with annual premiums ranging from ₦5,000 to ₦15,000, depending on your insurer and vehicle type.
Step 4: Receive Your Insurance Certificate
After payment, you will receive a digital or physical insurance certificate. Keep a copy in your car at all times, as police officers may request proof during routine checks.
Step 5: Verify Your Insurance Policy
To avoid fake policies, verify your insurance through:
- Nigerian Insurance Industry Database (NIID) Portal: www.niid.org
- USSD Code: Dial 56511# and enter your vehicle registration number.
- Your Insurance Company: Contact your insurer directly for verification.
How to Identify Fake Third-Party Insurance
Many vehicle owners unknowingly buy fake third-party insurance policies from unauthorized agents. To avoid fraud, watch out for these red flags:
| Red Flag | What It Means |
|---|---|
| Extremely Cheap Prices | If the price is too good to be true, it’s likely a scam. |
| No Official Receipt | Always request a receipt from a licensed insurer. |
| Unregistered Insurance Provider | Check if the provider is NAICOM-certified. |
| No Digital Verification | Always verify your policy on the NIID portal. |
Final Thoughts
The Nigeria Police’s enforcement of third-party insurance is a major step toward improving road safety and financial protection in Nigeria. Vehicle owners must take this law seriously to avoid fines, penalties, and unnecessary legal troubles.
To stay compliant and financially secure, ensure you purchase genuine third-party insurance from a licensed provider and always keep your certificate in your vehicle.
By following these steps, you protect yourself legally and financially while contributing to safer roads in Nigeria.
Have you secured your third-party insurance? Don’t wait until it’s too late! Get covered today and drive with confidence.
