Nigeria Police Begin 3rd Party Insurance Enforcement: What Car Owners Need to Know

 

The Nigeria Police Force has begun enforcing third-party motor insurance for all vehicle owners, effective from February 1, 2025. This initiative aims to enhance road safety, reduce the number of uninsured vehicles, and ensure accident victims receive financial compensation. Car owners in Nigeria must understand this policy to avoid penalties, stay legally compliant, and gain financial protection.

What is Third-Party Insurance?

Third-party insurance is a mandatory vehicle insurance policy that covers 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 exclusions, third-party insurance is a legal requirement in Nigeria and remains the most affordable type of motor insurance.

What Does Third-Party Insurance Cover?

  • Property Damage: Covers damage caused to another person’s car, house, or property.
  • Bodily Injury: Covers medical expenses or compensation for injuries inflicted on third parties.
  • Legal Liabilities: Covers legal costs 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 can result in fines or other legal actions.

Why is the Nigeria Police Enforcing Third-Party Insurance?

Although third-party insurance has always been required, compliance has been low. Many drivers fail to obtain insurance or purchase fake policies, leaving accident victims without compensation. The enforcement aims to:

  • Reduce Uninsured Vehicles: Many drivers lack insurance, making it hard to compensate accident victims.
  • Ensure Financial Protection: This ensures accident victims get proper compensation.
  • Improve Law Compliance: The Nigeria Police and the National Insurance Commission (NAICOM) are collaborating to eliminate fake policies and ensure adherence to the law.

Penalties for Driving Without Third-Party Insurance

If caught driving without valid third-party insurance, penalties include:

  • 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 damages and medical expenses

Benefits of Having Third-Party Insurance

  • Legal Compliance: Ensures you meet Nigerian legal requirements and avoids fines or legal actions.
  • Financial Protection: Covers damages and medical expenses for third parties in the event of an accident.
  • Peace of Mind: Knowing you're financially protected allows for stress-free driving.
  • Avoid Police Harassment: A valid insurance certificate helps avoid unnecessary police stops or harassment.

How to Get a Third-Party Insurance Policy in Nigeria

Follow these simple steps:

  1. Choose a Registered Insurance Provider: Only buy insurance from licensed companies registered with NAICOM.
  2. Provide Vehicle Information: You’ll need your vehicle's registration number, make, model, year of manufacture, and the owner's details.
  3. Pay the Premium: The insurance is affordable, typically ranging from ₦5,000 to ₦15,000 annually, depending on the vehicle type and insurer.
  4. Receive Your Insurance Certificate: After payment, you’ll get a digital or physical certificate. Keep it in your vehicle at all times.
  5. Verify Your Insurance: Use the Nigerian Insurance Industry Database (NIID) portal or the USSD code (56511#) to confirm the validity of your insurance.

How to Identify Fake Third-Party Insurance

To avoid fraudulent policies, watch for these red flags:

  • Extremely Cheap Prices: If it seems too good to be true, it likely is.
  • No Official Receipt: Always ask for a receipt from a licensed insurer.
  • Unregistered Providers: Ensure your insurer is NAICOM-certified.
  • No Digital Verification: Always verify your policy through the NIID portal.

Final Thoughts

The enforcement of third-party insurance by the Nigeria Police is a crucial step in improving road safety and ensuring financial protection in the country. Vehicle owners must take this law seriously to avoid penalties. Purchase genuine third-party insurance from licensed providers and keep your certificate in your vehicle to remain compliant and secure.

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