On February 1, 2025, the Nigeria Police Force (NPF) launched a nationwide enforcement of third-party motor insurance.
This comes after a directive given by the Inspector General of Police, Kayode Egbetokun to the State Commissioners of Police.
“This directive aims to reinforce road safety measures and ensure that all vehicle owners comply with the stipulated insurance requirements to protect themselves and others on the road,” Egbetokun said in a statement issued through the Force PPRO, Muyiwa Adejobi.
While the policy has been established under the Insurance Act of 2003, many Nigerians, especially vehicle owners, remain uncertain about the details and implications of this enforcement.
Here’s a breakdown of what third-party car insurance is, why it’s enforced, and the penalties for non-compliance.
What is third-party insurance?
Third-party insurance is a type of vehicle insurance that covers damages or injuries caused to another person (the “third party”) in an accident where the insured driver is at fault. It does not cover damages to the insured driver’s vehicle or personal injuries but ensures that victims of accidents are compensated. This insurance is a legal requirement under the Insurance Act 2003.Why is it enforced by police?
According to the police, the third-party insurance is the minimum coverage compulsorily required by law for any vehicle on Nigerian roads, while Comprehensive Motor Insurance is optional and recommended.
The purpose of every vehicle on the road having Third-Party Motor Insurance is to ensure the safety of others and provide financial compensation for damages, injuries, or loss of life in the event of accidents covered by the policy.
The enformcement, according to the police is in accordance with the Section 68 of the Insurance Act and Sections 1, 2, and 3 of the Motor Vehicle (Third-Party Insurance) Act.
Why you may be fined N250k for not having it?
As stated earlier, the police has started enforcing the third-party vehicle insurance policy as directed by the Inspector General of Police, Kayode Egbetokun. Some of the states which have started are; Lagos, FCT, Akwa Ibom, Osun, Bauchi, Kaduna, among others.
According to the law – Section 68 of the Insurance Act of 2003: “(1)No person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability which he may thereby incur in respect of damage to the property of third parties is insured with an insurer registered under this Act.
“(2) The insurance taken out pursuant to subsection (1) of this section shall cover liability of not less than N1 million.
“(3) The insurance under this section shall be in addition to the liabilities required to be insured under the Motor Vehicle (Third Party) Insurance Act, 1950, and shall be regulated mutatis mutandis by the provisions of the Act.
“(4) A person who contravenes the provisions of this section commits an offence and is liable on conviction to a fine of N250,000 or imprisonment for one year or both.”
How to obtain the third-party insurance
The Third-Party Motor Insurance Policy is not issued by the police, it can be procured from or through only licensed insurance entities authorized by the National Insurance Commission to transact motor insurance business in Nigeria.
It is sold for a premium of N15,000 per year to private car owners, while the premiums for commercial vehicles vary depending on the type of vehicle.
Benefits of third-party insurance
According to a statement issued by the National Insurance Commission (NIC), titled “Understanding the Latest Announcement of the Enforcement of Third-Party Insurance by the Nigeria Police Force, the benefits of the third-party insurance are;
“The Third-Party Motor Insurance Policy offers policyholders coverage up to N3 million to repair or replace the property of an innocent third party damaged during an accident.
“It also provides access to limited medical care for any injured third party as a result of the accident. In addition, it provides financial compensation to the family of the deceased innocent third party in the event of death.
“Furthermore, the Third-Party Motor Insurance Policy now includes third-party motor insurance coverage for the vehicle if driven to any West African country, as per the ECOWAS Brown Card Scheme.”
What to do if there’s issue
“A Complaints Bureau is also in place at the National Insurance Commission for resolving any complaints from the public who may be dissatisfied with an insurance company’s service or response to claims,” the NIC said.
Culled: intelregion