The ONE Law EVERY Road User in Nigeria should know

The ONE Law every road user in Nigeria should know

Billions of Naira in Nigeria goes unclaimed daily…Yes. You read that right, and no it is not an exaggeration.

Under Nigerian Law, every motor vehicle on the road must be insured against damage to the property of third parties. That is why every vehicle on Nigerian roads must have ‘Third Party Insurance’. Note that ‘motor vehicle’ in this sense includes motorcycles (okada) and tricycles (Keke Napep).

It is a criminal offence not to have this insurance and violators are liable to pay fines of up to N250, 000 or imprisonment for up to a year (or both).

The average third party insurance yearly premium costs around N5, 000 (Five thousand naira), and the minimum coverage is liability of at least N1million (One Million naira).  Unfortunately, as with a lot of things in Nigeria, people have found less than legal ways to obtain this compulsory insurance. A cottage industry peddling fake third party insurance has sprung up, and people buy this fake insurance for between N500- N2, 000 (depending on your haggling skills).

The reason why most people buy this insurance is really to avoid being stopped by the various agencies whose job it is to ensure that all motor vehicles have valid insurance (FRSC, VIO etc.) and not for the proper reason, which is to ensure you are protected by an insurance policy.

If you fall into this category of people who buy fake insurance, then stop it… you are really doing yourself more harm than good.

So, back to the issue…where are these billions of naira?

Well, it’s quite simple. Every time there is a motor vehicle accident the insurance company is supposed to pay out. How much and to who is dependent on the type of insurance you have. In this article, we are limiting our discussion to third party insurance.

So what is third party insurance? It is a type of insurance whereby the insurance party pays for damage to the property or for injuries to third parties. Let’s illustrate this:

Mr. Lagbaja owns a car and he has third Party insurance with ‘No Shaking Insurance’ (NSI). He’s driving down the road one day and he hits Ms. DoGood’s car. In this scenario, Mr. Lagbaja is at fault and so he is supposed to fix the damage to Ms. DoGood’s car, what should happen is that he pays for the damage and then goes to NSI to be reimbursed for the amount he has paid for repairing the damage (or he exchanges details with Ms. DoGood and gets NSI to contact her directly to repair the car…a very unlikely scenario in Nigeria!). So in essence, NSI pays for the damage to the third party – Ms. DoGood.

The problem however is this, most people who are in Mr. Lagbaja’s shoes repair Ms. DoGood’s car but never contact NSI to get reimbursed. This means that NSI doesn’t have to pay out money which they should…. and it is happening hundreds of times a day, every day of the year, in every state in Nigeria…so once again – Billions of naira is going unclaimed!!!

There are 3 broad reasons why this is happening:


  1. I no get am – Mr. Lagbaja has bought fake insurance or has no insurance at all and so he is unable to claim reimbursement even if he wanted to.
  1. I no know before’ – Mr. Lagbaja is not aware that the insurance he has on his car allows him to claim reimbursement
  1. ‘I no get time jare’ – Mr. Lagbaja thinks the stress involved to get reimbursed is too much, and not worth it.

So, to do our part to help Nigerians recover some of the billions going unclaimed, we will give you some pointers on what you can do:

For those in the  ‘I no get am’ camp, we advise that you should only buy insurance from accredited insurance brokers. If you already have insurance and want to verify if it is genuine, the Nigerian Insurance Association have created this nifty website – where you can check your policy to verify it’s authenticity.

If you are in the ‘I no know before’ camp, now you know. So if you find yourself in a situation like this in future, you know your rights and what you should do.

Finally for those in the ‘I no get time jare’ camp, there’s really not much we can tell you, apart from the fact that you are entitled to the money and so you shouldn’t cheat yourself.

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We hope you have found this information helpfulPlease note that this information is provided for general informational purposes only and is not intended to be legal advice. No lawyer-client relationship is formed nor should any such relationship be implied. This answer is not intended to substitute for the advice of a qualified lawyer. If you require legal advice, please consult with a qualified lawyer.


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