DESPITE many motorists expressing concerns about poor awareness campaigns, the Nigerian Police Force across the Federation has announced the commencement and enforcement of the mandatory minimum of Third-Party vehicle insurance from February 1, 2025.
The enforcement complies with the directive of the Inspector General of Police (IGP), Kayode Egbetokun, as motorists without valid third-party insurance have been advised to comply or face sanctions.
The ICIR reports that the Nigerian Police have been licenced since last November and now have the Nigeria Police Force Insurance Company.
However, informed analysts told The ICIR that those whose vehicles are insured through the comprehensive insurance policy have nothing to fret about on the police third-party insurance coverage enforcement exercise.
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“Those under comprehensive insurance policy are not affected by this police enforcement. Comprehensive has in it both the third-party-vehicle insurance coverage and the total insurance package for an insurer’s car, hence there’s no need for the police to disturb such person during enforcement,” an insurance sector governance expert, Modestus Anaesoronye told The ICIR.
Those under comprehensive insurance policy are not affected by this police enforcement. Comprehensive has in it both the third-party-vehicle insurance coverage and the total insurance package for an insurer’s car, hence there’s no need for the police to disturb such person during enforcement
“The person you hit his car if you have comprehensive is also completely covered. Third-Party is N15,000 officially, except you want to get a third-party extension or plus which enables you to take care of a little portion of the car in case of an accident to the tune of about N750,000. The comprehensive is a total package- mostly 5 per cent of the total cost of the car and payable annually. It expires annually. Because of the high cost of comprehensive insurance, most people opt for third-party vehicle insurance,” Anaesoronye stated.
The ICIR reports that the Police got a licence for the Nigeria Police Force (NPF) insurance package last November to enable them play huge part in the insurance market.
Commenting further, the President of the Association of Senior Staff of Banks, Insurance, and Financial Institutions (ASSBIFI), Olusoji Oluwole, said the Police need to drive an awareness campaign first with the Professional Insurance Association before embarking on its enforcement.
“The awareness campaign is low. There should be a month of enforcement in Motor Parks and other strategic spots before the enforcement. People don’t understand the value of insurance, hence the poor enrollment figures we have currently. Most people who take insurance take it as a result of obligations and not wanting to run foul of the law. Insurance is basically to protect oneself in the event of unforeseen indemnities and challenges,” Oluwole stated.
What is Comprehensive Insurance?
Investopedia describes the Comprehensive insurance as a type of automobile insurance that covers damage to your car from causes other than a collision. Comprehensive insurance will cover your vehicle if destroyed by a tornado, dented by a run-in with a deer, spray-painted by a vandal, damaged by a break-in, crushed by a collapsing garage, or many other causes.
While the policy has been established under the Insurance Act of 2003, many Nigerians, especially vehicle owners remain uncertain about the details and modalities of Police enforcement.
Already, the official spokespersons of the police across the federation have directed various commands to ensure compliance with the new directive.
What to know about the third-party insurance policy
As a means of spreading loss, insurance is an agreement where one party, the insurer, agrees, in return for a consideration called the premium, to pay the other party, the insured, a certain sum of money at the happening of a specified uncertain event or events.
Over the years, third-party insurance policies have developed. It is one under which the insurer (the second party) agrees to indemnify the insured (the first party) if he is liable for injuries done to another person (the third party) who is not a party to the contract.
Such insurance policies cover losses that result from acts or omissions of the insured that are deemed negligent and result in damage to the person, property, or interests of other persons.
The damage could be in respect of professional, product, or motor vehicle; motor vehicle third-party liability includes every other person except the contracting parties to the insurance contract.
The person could be a passenger in the insured vehicle, or another vehicle for that matter, or someone walking along a road in the vicinity of the accident.
The ICIR reported that Third-party motor vehicle insurance is a mandatory policy in Nigeria that provides financial protection against damages or injuries caused to third parties by the insured vehicle.
What does the law say?
The Motor Vehicles (Third Party Insurance) Act in Nigeria provides that certain guidelines for users of motor vehicles to be insured against third-party risks shall observed.
Section 3 (1) says, “Subject to the provisions of this Act no person shall use, or cause or permit any other person to use a motor vehicle unless there is in force about the user of that motor vehicle by such person or such other person as the case may be such a policy of insurance or such a security in respect of third party risks as complies with the provisions of this Act.
Subsection (2) provides that any person acting in contravention of this section shall be liable on conviction to a fine of four hundred nairas or to imprisonment for one year or to both such fine and im- imprisonment and a person convicted of an offense under this section shall be disqualified for holding or obtaining a driving licence.
Subsection (3) adds that a disqualification under the provision of subsection (2), unless the court for special reasons to be recorded otherwise orders, shall be for a minimum period of twelve months from the date of the conviction, and any person so disqualified for holding or obtaining a driving licence under the provisions of this section shall be deemed to be so disqualified under the provisions of the Road Traffic Laws.
NAICOM explains what insurance means for motorists
The National Insurance Commission (NAICOM) has expressed its support for the Nigeria Police Force’s announcement that effective February 1, 2025, the Third-Party Motor Insurance Policy for all vehicles on Nigerian roads will be enforced nationwide.
This move ensures strict compliance with Section 68 of the Insurance Act 2003.
NAICOM acknowledges that many Nigerians, particularly vehicle owners, may lack awareness of the law’s significance and the benefits of the Third-Party Motor Insurance Policy.
Third-party Motor Insurance is the minimum coverage compulsorily required by law for any vehicle on the roads, while Comprehensive Motor Insurance is optional and recommended.
The essence of every vehicle on the road having Third-Party Motor Insurance is to facilitate the safety of others and ensure the financial recovery/compensation for damages and/or injuries or loss of lives in the event of accidents covered by the policy.
Third-party Motor Insurance Policies can be procured from or through only licensed insurance entities authorised by NAICOM to transact Motor Insurance business in Nigeria.
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 gives the policyholders a limit of N3m to repair or replace the property of the innocent third party damaged during an accident.
Also, it gives policyholders access to limited medical care for any third party injured as a result of the accident.
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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 cover for the vehicle if the vehicle was driven to any West African country based on the protocol of 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 all complaints that may emanate from members of the public who may be dissatisfied with an insurance company’s service or response to claims.
This move, NAICOM said is expected to enhance road safety, protect the rights of accident victims, and promote the overall growth of the insurance sector in Nigeria.
EDITOR’S NOTE:
* This article was republished from The ICIR. You can read the original article here.
