Every car owner in Nigeria has been stopped at a checkpoint and asked for their insurance certificate. Most people produce one. Far fewer could tell you what it actually covers.
That gap between having a policy and understanding it is one of the most expensive mistakes Nigerian drivers make, and it is entirely preventable.
This guide explains motor insurance in plain language: what it is, what the law requires, what the different types cover, and how to avoid the most common mistakes.
Motor insurance is compulsory in Nigeria. Here is what the law says.
Under Nigerian law, every vehicle on a public road must be covered by at minimum a valid third party motor insurance policy.
This is not optional. Driving without it is an offense, and fake insurance certificates, which are unfortunately common, offer no legal protection and will not pay a naira if you have an accident.
The National Insurance Commission (NAICOM) maintains a list of licensed insurers authorized to issue motor insurance in Nigeria. If your insurer is not on that list, your certificate is not valid, regardless of what it looks like.
So what does motor insurance actually cover?
Motor insurance in Nigeria comes in two main types. Understanding the difference could save you a significant amount of money.
Third party motor insurance
This is the minimum required by law. Third party cover protects other people if you cause damage or injury.
If you drive into another car and damage it, your third party policy pays for the other driver’s repairs. If a pedestrian is injured, the policy covers their medical costs and any legal liability.
What it does not cover: your own car, your own injuries, or your own losses of any kind.
Comprehensive motor insurance
Comprehensive cover does everything third party does, and then covers your own vehicle too.
If your car is stolen, a comprehensive policy pays out. If a flood damages your engine, a comprehensive policy covers the repair. If you are in an accident that destroys your car, a comprehensive policy covers the replacement or repair cost.
Comprehensive cover costs more. But if your car is worth a significant amount, third party cover is not actually protecting you, it is only protecting other people.
Which type should you choose?
The short answer: it depends on your car’s value.
If you drive an older vehicle with a low market value, the cost of comprehensive cover may exceed what the insurer would pay you in a total-loss claim. Third party makes financial sense in that case.
If your car is relatively new, financed through a loan, or would cost more than you can easily replace out of pocket, comprehensive cover is the only sensible choice.
A useful rule of thumb: if repairing or replacing your car after an accident would cause you serious financial stress, buy comprehensive.
What most people do not check, and should.
What is your excess (deductible)? Most motor insurance policies require you to pay a portion of any claim yourself. This is called the excess or deductible. If your excess is N50,000 and your repair costs N60,000, you pay N50,000 and the insurer pays N10,000. Know your excess before you buy.
Is the certificate genuine? Fake motor insurance is a well-documented problem in Nigeria. The Nigeria Insurers Association runs verification campaigns because the problem is that widespread. Always verify your certificate through NAICOM’s portal. If it cannot be verified, it is not valid.
What does the policy exclude? Common exclusions include: floods and water damage (sometimes), mechanical breakdown, damage while the vehicle is used for hire or commercial purposes (if you have a private vehicle policy), and civil unrest or riots. Read the exclusions before you sign.
How fast does the insurer pay claims? This is the question most people forget to ask. A policy that takes eight months to settle a claim is not good insurance regardless of its price. Ask your insurer for their average claims timeline and escalation process.
Three mistakes Nigerian drivers make with motor insurance.
Mistake 1: Buying the cheapest certificate without checking if it is valid. Cheap certificates sold by roadside vendors or informal agents are almost always fake. They will not be honored by any court or insurer.
Mistake 2: Assuming third party cover is enough because it is the law. Third party is the legal minimum, not the sensible minimum. It protects other people. If you care about your own car, your own costs, and your own safety, you need more.
Mistake 3: Not reading the exclusions. People buy motor insurance and assume everything is covered. Then they discover that flood damage is excluded, or that their car was being used in a way the policy does not cover. Read what is excluded before you pay.
How to get motor insurance that actually works.
- Use a NAICOM-licensed insurer. Verify them on the NAICOM portal.
- Decide between third party and comprehensive based on your car’s value.
- Read the exclusions and understand your excess.
- Know how to contact your insurer if you need to make a claim.
- Keep your certificate accessible, and verify it is traceable if a traffic official asks.
Verdure’s motor insurance is NAICOM-licensed, digitally issued, and verifiable. You can get a quote in under 3 minutes. Get My Motor Insurance Quote
Have a question about motor insurance in Nigeria? Read our Motor Insurance FAQ or talk to our team on WhatsApp.
