Starting February 1, 2025, the Nigeria Police Force (NPF) has begun enforcing the mandatory third-party motor insurance law nationwide. This directive, issued by the Inspector General of Police, Kayode Egbetokun, requires all vehicle owners to have valid third-party insurance or risk penalties, including a ₦250,000 fine or imprisonment.
Here’s what you need to know about the enforcement, penalties, and how to stay compliant.
What Is Third-Party Car Insurance?
Third-party insurance is the minimum legal motor insurance required for vehicles in Nigeria. It covers damages, injuries, or loss of life suffered by others (third parties) in an accident caused by the insured driver. However, it does not cover damages to the insured driver’s own vehicle.
This policy is mandated under Section 68 of the Insurance Act 2003 and the Motor Vehicle (Third-Party Insurance) Act, 1950.
Why Is the Police Enforcing It?
The police say third-party insurance is crucial for road safety and financial protection in case of accidents. The enforcement is backed by:
- Section 68 of the Insurance Act 2003
- Sections 1, 2, and 3 of the Motor Vehicle (Third-Party Insurance) Act
The initiative has already started in Lagos, Abuja (FCT), Akwa Ibom, Osun, Bauchi, Kaduna, and other states.
Why You Could Be Fined ₦250K
Failure to obtain valid third-party insurance is now a punishable offense. According to Section 68 of the Insurance Act:
- No person shall use a motor vehicle without third-party insurance.
- The policy must cover at least ₦1 million in liability.
- Violators face a ₦250,000 fine or one-year imprisonment, or both.
How to Get Third-Party Car Insurance
Third-party motor insurance is not issued by the police but can be obtained from licensed insurance companies regulated by the National Insurance Commission (NAICOM).
- Cost: ₦15,000 per year for private car owners.
- Commercial vehicle rates vary based on vehicle type.
Benefits of Third-Party Insurance
According to NAICOM, the policy offers:
- Up to ₦3 million coverage for damages to a third party’s property.
- Medical expenses for third-party injuries.
- Compensation for families of deceased victims.
- ECOWAS Brown Card Scheme – Extends coverage to West African countries.
What to Do If You Face Issues
If you have disputes with an insurance provider over claims, you can lodge a complaint at the National Insurance Commission’s Complaints Bureau.
With the Nigeria Police now strictly enforcing the law, vehicle owners are urged to obtain valid third-party insurance to avoid hefty fines or legal action.
