The Nigeria Police Force (NPF) commenced full enforcement of the Third-Party Motor Vehicle Insurance policy nationwide on Saturday, February 1, 2025. The directive, issued by Inspector General of Police (IGP) Kayode Egbetokun, is in line with the Insurance Act and the Motor Vehicle (Third-Party Insurance) Act, which mandate that all vehicle owners have at least third-party insurance.
The enforcement seeks to address the significant number of uninsured and fake insurance certificates on Nigerian roads, estimated at 9.4 million. According to the Nigeria Insurers Association (NIA), only 2.72 million vehicles had valid insurance as of February 2021, highlighting the prevalence of fraudulent practices in the insurance sector.
Why Third-Party Insurance Matters
Third-party insurance offers essential financial protection to road users by covering damages and medical expenses for victims involved in accidents caused by the policyholder. This ensures that those affected receive due compensation without out-of-pocket expenses for the at-fault driver.
Beyond legal requirements, valid third-party insurance shields motorists from unexpected financial burdens. Whether damage to another person’s vehicle or medical bills resulting from an accident, this policy offers essential financial coverage and helps drivers avoid legal and financial complications.
Revised Insurance Premium Rates
The National Insurance Commission (NAICOM) reviewed insurance premium rates to further regulate the sector. The new rates, which came into effect on January 1, 2023, are as follows:
- Private vehicles: ₦15,000 premium for a ₦3 million Third-Party Property Damage (TPPD) limit (previously ₦5,000 for ₦1 million coverage).
- Owner goods vehicles: ₦20,000 premium for a ₦5 million claim limit.
- Staff buses: ₦20,000 premium for a ₦3 million claim limit.
- Commercial trucks/general cartage: ₦100,000 premium for a ₦5 million TPPD limit.
- Tricycles (Keke): ₦5,000 for a ₦2 million TPPD limit.
- Motorcycles: ₦3,000 for a ₦1 million TPPD limit.
For comprehensive motor insurance, the premium must be at least 5% of the insured vehicle’s value after deductions for rebates and discounts.
How to Verify Your Insurance Policy
Motorists can verify the authenticity of their insurance coverage through the Nigerian Insurance Industry Database (NIID) by:
- Visiting www.askniid.org
- Dialing *565*11# on any mobile phone, with or without internet access.
Where to Get Reliable Third-Party Insurance in Nigeria
To avoid falling victim to fraudulent agents, motorists should obtain their insurance from reputable providers. Some leading insurers offering legitimate motor insurance policies include:
- Allianz Nigeria: Provides comprehensive car insurance with options.
- AIICO Insurance: Offers comprehensive auto insurance.
- AXA Mansard: Provides affordable car insurance with options.
- Leadway Assurance: Delivers comprehensive auto insurance.
- Custodian Insurance: Covers repairs, replacements, and medical expenses.
Choosing the Right Insurance Policy
Before purchasing a policy, consider these key factors:
- Coverage Options: Ensure the policy aligns with your specific needs and offers necessary add-ons.
- Premium Costs: Compare rates to find a budget-friendly option.
- Claim Settlement Process: Research the company’s track record for handling claims efficiently.
- Customer Service: Evaluate responsiveness and support quality.
With increased enforcement of third-party insurance laws by the police, motorists must have valid insurance coverage to avoid penalties and potential legal issues. Beyond legal compliance, securing genuine third-party vehicle insurance offers peace of mind, financial protection, and a safety net in case of road incidents. To stay compliant and avoid police penalties, motorists should verify their insurance status and purchase policies only from accredited providers.
