Understanding Third-Party Car Insurance In Nigeria: What You Need to Know

Third-party car insurance is a type of car insurance policy that protects car owners from losing or damaging a third party’s vehicle. Using third-party car insurance, car owners won’t have to worry about paying extra free to repair another driver’s car if, for any reason, they hit the car on the road.

This article explains everything you should know about paying for third-party car insurance in Nigeria. 

Third-Party Insurance in Nigeria

Third-party car insurance is a compulsory insurance policy for car owners in Nigeria under the Motor Vehicle (Third Party) Insurance Act of 1950. It is classified as one of the six compulsory types of insurance under the laws of the Federal Republic of Nigeria.

There are other types of insurance in Nigeria that are compulsory. They are Group Life Insurance, Health Care Professional Indemnity Insurance, Insurance of Public Buildings, Insurance of Buildings in Construction, and Employers’ Liability Insurance.

The third-party car insurance policy is the minimum coverage a vehicle using Nigerian roads is required to have by law. The policy protects the insured from liability for death or injury to a third party arising from vehicle usage. 

The Insurance Act 2003 expands the scope of cover for third-party insurance to include – cover for damage or losses to the property of a third party to a tune of N1m. it is also a criminal offence not to possess at least a third-party car insurance policy.

Here’s How to Get Third-Party Car Insurance in Nigeria

Car insurance policies, including Nigeria’s third-party car insurance policy, are sold in any company with a National Insurance Commission (NAICOM) license as a general or composite insurance company. 

To buy the third-party car insurance policy, you will need to fill out the following forms;

• Know Your Customer (KYC) Form
• Motor Proposal Form
• Insurance Physical Inspection Form

Here are some of the insurance companies where you can get third-party car insurance in Nigeria:

• Leadway Assurance
• Custodian Insurance Plc
• Axa Mansard
• Allianz Nigeria Insurance
• NEM Insurance
• Consolidated Hallmark
• AIICO Insurance
• Mutual Benefit Insurance

How Much Is The Third-Party Car Insurance In Nigeria?

In Nigeria, third-party insurance coverage is relatively cheaper than comprehensive insurance policies. Depending on the type of vehicle, the annual insurance premium costs between N5,000 to N10,000.

After completing the purchase of your comprehensive car insurance policy, you will get a certificate of insurance. The certificate confirms your eligibility to report a claim in case of any unforeseen circumstance on the vehicle.

How To Confirm the Authenticity of Your Third-Party Car Insurance

Many fake insurance agents out there take advantage of the ignorance of most car owners. Given this, it is not enough to receive your policy certificate and relax – you must confirm the authenticity of the certificate. This can be done in two ways:

• 1. Visiting the Website of the Nigerian Insurance Industry Database (NIID)

Visit www.askniid.org and follow the laid-out instructions. You will need your vehicle and insurance policy numbers to search their database. If it comes back with a result, confirm that the bearer of the policy carries your name. If it doesn’t come back with any result, it might have been a fake, and you need to contact your insurance officer immediately.

• 2. Using the Nigerian Inter-bank Settlement System (NIBSS)

In partnership with the Nigerian Insurers Association (NIA), NIBSS launched the USSD code for validating motor insurance policies. To confirm the validity of your car insurance, just type *565*11# and enter your vehicle registration number – That’s it!

Why Do You Need Third-Party Car Insurance?

The insurance coverage of third-party insurance is only beneficial to a third party. That’s to say if you can use it when you run into any car damage with your car. However, it saves you the cost of repairing or replacing a third-party’s car damages. 

Here are the core reasons why you need third-party car insurance:

• Third-Party Car insurance offers protection against liability arising from damages to a third party
• It protects you from suffering punishment by law
• It is cheaper in comparison to a comprehensive car insurance policy

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Conclusion

Third-party car insurance plays a great role in contributing to the responsible driving attitude of road users and has saved many car owners from emergency costs. As a Nigerian, holding third-party car insurance protects you from the punishable hands of Nigerian traffic law. However, when purchasing this insurance, ensure you’re working with an insurance broker who explains everything involved in detail.