The Nigeria Police Force has commenced a nationwide enforcement of third-party motor insurance, effective February 1, 2025, to reduce the number of uninsured vehicles and ensure accident victims receive proper compensation.
Despite being mandated under the Insurance Act of 2003, many vehicle owners remain unclear about its requirements. The enforcement is happening simultaneously across the country, with non-compliant motorists facing penalties.
According to the National Insurance Commission (NAICOM), third-party insurance is the minimum legal requirement for vehicles on Nigerian roads, while comprehensive insurance remains optional. The policy, available for ₦15,000 per year for private cars, covers up to ₦3 million in third-party damages and extends to ECOWAS countries under the Brown Card Scheme.
A press statement by the NIC, titled “Understanding the Latest Announcement of the Enforcement of Third-Party Insurance by the Nigeria Police Force,” explained that latest enforcement.
What third-party insurance means
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 National Insurance Commission welcomes the announcement by the Nigeria Police Force that, effective 1st February 2025, there will be a nationwide enforcement of Third-Party Motor Insurance for all vehicles on Nigerian roads.
“This move aims to ensure compliance with Section 68 of the Insurance Act 2003.
“The Commission recognizes that many Nigerians, especially vehicle owners, may not fully understand the importance of the law or the benefits of the Third-Party Motor Insurance Policy.
“So, what does this mean for vehicle owners in Nigeria? To answer this question, the Commission states as follows:
“Third-Party Motor Insurance is the minimum coverage compulsorily required by law for any vehicle on our roads, while Comprehensive Motor Insurance is optional but 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 Third-Party Motor Insurance Policy can be procured from or through only licensed insurance entities authorized by the National Insurance Commission to transact motor insurance business in Nigeria.
Coverage
“The Third-Party Motor Insurance Policy 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.
“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.
“The Commission encourages vehicle owners in Nigeria to take full advantage of the enforcement announced by the Nigerian Police Force to ensure the safety and protection of lives, properties, and financial compensation for innocent third parties on our roads.
“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.”
NAICOM urged motorists to comply and assured the public of a complaints bureau to handle grievances related to insurance claims.
