Third-party vehicle insurance will facilitate damage compensation, says NAICOM

The National Insurance Commission (NAICOM) says the third-party vehicle insurance will facilitate compensation for damages caused to third parties in the event of road accidents.

In a statement on Wednesday, the commission expressed support for the Nigeria Police Force’s announcement of a nationwide enforcement of the third-party motor insurance policy starting February 1, 2025.

The initiative is aimed at ensuring compliance with Section 68 of the Insurance Act 2003.

NAICOM noted that many Nigerians, particularly vehicle owners, may not fully understand the benefits and importance of third-party motor insurance.

The commission said the policy is essential for road safety and ensures financial compensation for damages, injuries, or loss of lives in accidents involving third parties.

“The Third Party Motor Insurance is the minimum coverage compulsorily required by law for any vehicle on our roads, while Comprehensive Motor Insurance is optional and recommended,” NAICOM said.

“The essence of every vehicle on the road having the Third Party Motor Insurance is to facilitate 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.

“The Third Party Motor Insurance Policy licensed procurance entities authorized insurance entities authorized by the National Insurance Commission 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 vehicles.

“The Third Party Motor Insurance Policy gives the policyholders the limit of N3m to repair or replace the property of the innocent third party damaged during an accident.

“Also, it gives the policyholders access to limited medical care for any injured third party as a result of the accident. In addition, it provides financial compensation to the family of the deceased innocent third party in the event of death.”

NAICOM said the policy now includes coverage for vehicles travelling within West African countries under the ECOWAS brown card scheme.

The commission urged vehicle owners to take full advantage of the enforcement, which is expected to enhance public safety and provide financial protection for innocent third parties.

NAICOM said it has established a complaints bureau within the commission to address complaints from the public regarding unsatisfactory services or claim responses by insurance companies.