Third-Party Motor Insurance in Nigeria…
The local parlance, “Police-Let-Me-Pass,” is used in Nigeria to denote Third Party Motor Insurance Policy. This mandatory form of insurance remains the most enforced out of all the compulsory insurance.
Year after year, motorists renew their vehicle particulars to be on the right of the law. At the licensing office, some people have formed the habit of renewing all their vehicle papers, including their vehicle insurance.
This habit is not bad, but surprisingly it might turn out to be. This is because some licensing agents embark on shady deals regarding motor insurance covers. If care is not taken, you might get fake insurance papers, so exercise caution when dealing with them.
We shall be talking about How To Confirm The Authenticity Of Your Insurance Certificate in our subsequent posts. Watch out!
It is important to note that your Third Party Motor Insurance is more than ‘Police-Let-Me-Pass.’ It will save you a lot of heartaches and might cause tremendous heartbreak if absent.
It might seem insignificant, but there is more to it than you think. This post is written to enlighten you more about your Third Party Motor Insurance.
There are three basic motor insurance covers, and these include:
- Comprehensive Motor Policy
- Third-Party, Fire & Theft Motor Policy
- Third-Party Only Motor Policy
Out of the three, the last one is the minimum insurance required by law for every vehicle owner – which is the focus of this post.
Read:Â Toyota Motors Dealers in Nigeria and Their Office Addresses, Phone Number and Email
What Is Third-Party Motor Insurance?
Third-Party Motor Insurance is one of the five compulsory insurances in the country, made mandatory by the Insurance Act 0f 2003. To learn more about Compulsory Insurance in the country, please read, Compulsory Insurance In Nigeria: What You Must Know?
Third-Party Motor Insurance is the minimum insurance cover that every car user and the owner must possess. Legally, you are not expected to drive any vehicle on any public road without insurance.
The policy provides indemnity to Third Parties for death, bodily injury, and property damage due to an accident with the insured’s automobile. The insured, in this case, is the vehicle owner.
Legal Background
Third-Party Motor Insurance in Nigeria has its legal backing in Section 68 of the Insurance Act of 2003. The Act states, “No p” person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability which he may thereby incur in respect of damage to the property of third parties is insured with an insured.”
U “d” r this Act, the penalty for non-compliance of any motorist or driver is N250,000, one-year imprisonment, or both. Note that compliance with this Act is total, i.e., after purchase, it must be renewed at expiry every year. Expired/unrenewed insurance is like no insurance.
Have You Seen: Compulsory Insurance in Nigeria: What you Must Know
What is the fate of a person who was hit by a vehicle that does not have insurance or a hit-and-run driver?
A third party who got hit by an uninsured vehicle or a hit-and-run is protected by the National Insurance Act 2003. The protection is provided by Section 78 of the Act. The Act made it mandatory for all registered insurers to contribute to a security fund administered by the National Insurance Commission. Section 78 (1)(a)(b) states that”
“Th” “und is to:
- Be used for payment of any claim admitted by or allowed against a registered insurer where such claim remains unpaid due to insolvency or cancellation of the registration of the insurer; and
- Be used to compensate innocent individual third parties permanently disabled or killed by uninsured or unidentified driver”.”
T “e” National Insurance Commission determines the thfund’fund’slsl and the proportion of compensation paid for any claim.
What and Who Is Covered?
As mentioned in the definition, this policy covers the following:
- Your legal liability to third parties for death or injury to such and any damage to their property or properties from using your motor vehicle. The limits of liability are as follows:
- Death/Injury – Liability payable is unlimited (depending on the court’s saying)
- Third-Party Property Damage – Liability payable is a minimum of N1m.
- Your lawyer for your legal representation or your drivers at any judicial proceeding arising from an accident may give rise to a claim under the policy and other expenses.
Exclusions – What and Who is not Covered?
Under this policy you should be aware that this policy does not cover you or your vehicle. As the name implies, it only covers third parties. Under the Act, a Third Party is someone other than you, your relatives, or employees.
In a contract of insurance, you are the first party, your insurer is the second party, and any other person beside you and those mentioned earlier is the Third Party.
If you need motor insurance covering you and your vehicle, go for Comprehensive Motor Insurance. More on this in our subsequent post: What Should I Buy: Third Party Motor Insurance vs. Comprehensive Motor Insurance?
Premium – What Does It Cost?
This type of policy is the cheapest form of insurance you can ever buy. For as low as N1,500, you can buy yourself one and get serious value for money, especially during claims. Are you shocked? Don’t! Here are the associated costs:
Private Motor                  –             N5,000
Commercial Motor        –             N10,000
Motorcycle                       –             N1,500
However, because of competition, the above prices have been driven down by insurance companies.
Conclusion
Third-Party Motor Insurance is a very common and essential form of insurance that all motorists or vehicle owners should not toy with.
They should not be forced before purchasing it. It is funny how people will spend millions to buy expensive cars but will have difficulty insuring them with a few thousand.
Please do yourself a favor and get insurance cover for that vehicle!
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