The Nigerian Police Force has announced that from next Saturday, February 1, it will start the enforcement of the minimum Motor Insurance (Third Party) Act for vehicles nationwide.
Consequently, I am revisiting motor insurance a few weeks after I did a similar article. I had to drop the article for today because the enforcement starts next Saturday and this is the last opportunity I have to inform or remind you. The implementation has consequences.
In view of the economic hardship, you need to avoid any thing that will make you get into police trouble that can lead to avoidable expenses. In fairness to the Nigeria Police, they are only trying to implement an 80-year-old law that is very important to other road users!
The Motor Vehicles (Third Party) Insurance Act of 1945, which took effect from 1st April 1950, makes it an offence for anybody to use a motor vehicle on the road without having in place the minimum Motor (Third Party) Insurance to cover the motorist against liabilities arising from third party bodily injuries or death. The 2003 Insurance Act added third party property damage.
The penalty if you run afoul of the law is a fine of N250,000 fine or/and one-year imprisonment. Whether you pay the fine or go to prison, you become an ex-convict subsequently and you know the implications: It can stop you from holding public office or be a director of a company. Prevention is better than cure.
Nigerian road users are like a polygamist with many wives. You have the favourite wife/wives called amebo and the wives who have fallen out of favour. In Urhobo, we call them avwiorovwen. On our roads, you are either an amebo or avwiorovwen. This applies not only to the police, but road safety, customs agent and other uniformed personnel.
The amebos include the rich, motorists with grey hairs, especially if they drive expensive or neat vehicles, members of the judiciary, armed forces personnel, people with security escorts, the clergy especially those high up the rank, journalists with car stickers, etc. The avwiorovwe are those with old and rickety vehicles, young men driving expensive cars, young men with tattoos or wearing ear rings and carrying braids.
This article should ordinarily be for everyone because the law is specific: do not put your vehicle on a public road without the minimum third party motor insurance. But I am talking specifically to the avwiorovwen because our matter different for Nigeria.
If you are an aviorovwen, you better get the minimum third party motor insurance before next Saturday. It is not enough that you buy the insurance. Ensure you buy from a genuine source. I have shared them before and I will do so again. You can buy directly from an insurance company or an insurance brokerage company licensed by the National Insurance Commission (NAICOM), the regulatory body of insurance in Nigeria.
I always advise that you do so through an insurance broker because they are your agents and will help you to process your claim in the event of an accident leading to a claim. What is insurance without payment of genuine claims? You can contact companies authorized to issue or act on your behalf at: naicom.gov.ng and
The third party insurance premium is N15,000 for private vehicles and N20,000 for commercial vehicles and staff buses. Tricycles and motorcycles are N3,000 and N2,000 per annum to abide by the law. These sums are less than what agberos collect from okada and keke daily. Premium for trucks is N100,000 per annum. Now compare these premiums with the N1m fine for default or if you get into police wahala? Mostly affected will be the avwiorophes. You don’t want me to elaborate. Na Nigeria all of us dey.
Another reminder, ensure that you have downloaded the NIID (Nigeria Insurance Industry Database) app on your phone. It contains the data of all vehicles with genuine motor insurance policies in Nigeria. With the admonition so far, some people will still and get their motor insurance under the bridge or from motor licensing offices. Check on the NIID platform to be sure you have a genuine insurance. If it is not there, it is fake. Many policemen in Lagos already have the app on their phones.
With the enforcement starting next Saturday, many more policemen across Nigeria will download it. Ogun State to Benin routes are particularly on my mind. I have forewarned and forearmed you.
A few weeks ago when we treated “motor insurance simplified,” we explained that the benefits of third party motor insurance are for third parties (other road users) only for bodily injuries, death and property damage. The policyholder gets no personal benefits. The second motor insurance policy, third party, fire and theft has limited benefit for the policyholder which applies if his vehicle is damaged by fire or stolen. And the premium is about two-third of the comprehensive motor insurance premium.
Only comprehensive motor insurance gives the policyholder full coverage and the premium is 5% of the insured value. Many people say they cannot afford both premiums; meanwhile they want a policy that can give them some benefits for own damage (damage to their vehicle).
Some insurance companies have come up with products that care of third parties and limited benefit for own damage for policyholders. The extended third party insurance can cover own damage as high as N500,000, but it is good to involve your insurance broker to negotiate additional premium to the N15,000 basic third party premium to get the cover, especially if it is not expressly stated. But this policy is not suitable for all vehicle owners.
For instance, if the value of your car is N150m, it is useless and a waste of the extra premium. In the event of an accident, one headlight of a luxury car can cost as much as N1.5m to replace. The truth is that many owners of expensive cars only do third party insurance to comply with the law. I tried marketing someone with a garage worth over N5b. He said he was contented with third party insurance. “What of if your car is involved in an accident or stolen?” “Francis, if this one get accident, other ones dey to drive. Who dey thief expensive motor sef? If e get accident or dem thief my motor, money dey to replace am.” I closed the matter there, or what do you want me to do? Give a lecture on financial management to a multi-billionaire who has his mind made up?
On the other hand, repairs of many vehicles under N10m in value will not cost more than N500,000 in the event of an accident that is not severe. These are the kind of vehicles that this variant of Motor (Third Party) Insurance is suitable for. But the policyholder must be aware of the risk he is carrying. In the event of extensive damage to his vehicle, he will be his own insurer for any amount above insurance policy limit. For instance, if you are involved in an accident that will cost you N1.5m to fix your car, the maximum you can get from the insurance company is N500,000. You are your own insurer for the balance of N1m.