… As NPF kickoff Third-Party Motor Insurance enforcement drive
By David Akinmola
Following the nationwide enforcement of the Third-Party Motor Insurance Policy, underwriting firms will realise over N142 billion in revenue from 9.5 million uninsured vehicles in the country by the end of this year financial, The Guardian has learned.
However, a check in the insurance revealed that, the 9.5 million uninsured vehicles will now be forced to part with N15, 000 each as motor insurance premium, which now amounts to over N142 billion, a development that will further increase the revenue base of insurance industry in the 2025 financial year.
Third-party insurance is the minimum coverage compulsorily required by law for any vehicle on Nigerian roads, while Comprehensive Motor Insurance is optional and recommended.
Data sourced from the Nigerian Insurers Association (NIA) and the Federal Roads Safety Corps (FRSC) showed that 12 million vehicles are plying Nigeria roads of which only 3.6 million were insured, leaving 9.5 million vehicles uninsured.
Earlier in January, the Inspector-General of Police, Kayode Egbetokun, announced nationwide enforcement of third-party motor insurance from February 1, 2025. Section 68 of the Insurance Act and Section 312 of the 1945 Motor Vehicle (Third Party Insurance) Act mandated all vehicle owners to possess third-party insurance before driving vehicles on public roads.
The planned nationwide enforcement of the Third-Party Motor Insurance Policy, effective February 1, 2025, is expected to limit the volume of fake insurance certificates, increase subscriptions to genuine insurance, and increase insurance adoption in the country.
Prior, the Nigerian Insurers Association (NIA), said in one of the industry forums that, the association recognises the immense potential of this enforcement to drive positive change in the insurance industry and the broader economy.
“With millions of vehicles on Nigerian roads, this move is expected to increase the number of genuinely insured vehicles, reduce the prevalence of fake insurance policies, and create a more robust safety net for motorists and road users alike,” it stated.
The chairman of the association, Kunle Ahmed, noted that the initiative also aligns with his administration’s agenda to prioritise increasing awareness of the benefits of insurance, fostering innovation within the industry, and enhancing partnerships with key stakeholders to strengthen Nigeria’s insurance ecosystem.
As the enforcement takes effect, he assured the insuring public and other stakeholders that its members are fully prepared to provide seamless access to third-party motor insurance policies through authorized channels, ensuring that every Nigerian motorist can protect their risk and comply with the law.
According to him, we will work closely with our members to ensure efficient service delivery, innovative products, and improved customer experiences, he pledged.
NIA believes this enforcement is a game-changer for the industry, as it will encourage greater public trust in insurance, reduce uninsured risks, and stimulate economic activity.
“The NIA urged vehicle owners nationwide to take full advantage of this opportunity by obtaining their third-party motor insurance policies through licensed and authorised insurers. We can build a safer, more accountable, and better-protected road network for all Nigerians,” he stressed.
This initiative, he said, aligns with the provisions of Section 68 of the Insurance Act 2003 as it is a significant step towards strengthening compliance, ensuring road safety, and protecting motorists and third parties on Nigerian roads.
Speaking also on the development, the president, the Nigerian Council of Registered Insurance Brokers (NCRIB), Prince Babatunde Oguntade, applauded the motor insurance enforcement initiative, saying, his council is in full support and will offer the needed assistance when needed.
If the enforcement is implemented to the latter, and more vehicles are now insured, he said, this will further deepen insurance penetration and acceptance in the country.
He also charged the regulatory authorities to extend such enforcement to other classes of insurance, especially, the compulsory ones, such as; Public buildings insurance, and group life insurance, among others, so that, violators are made to face the wrath of the law.
The FRSC Act demands that any automobile on Nigerian roads must have at least a third-party motor insurance policy or comprehensive insurance coverage which goes for about 10 per cent of the value of a vehicle.
Third-Party Vehicle Insurance comes at a fixed price of N15,000 after it was increased from N5,000 last year to cater for inflation and increasing price for vehicle spare parts.
Speaking on the enforcement, the Managing Director/Chief Executive Officer of IEI, Olasupo Sogelola, urged Nigerians who already have a valid policy and suffer damage or injury from accidents to always reach out to their insurance companies to make a claim.
He went on to applaud Egbetokun for the enforcement of the policy, noting that it will generally improve insurance acceptability and deepen penetration in the industry.
He, however, said insurance operators need to look into how they can continuously ensure that the third-party motor policy is made available and the distribution model is properly followed through because they will not always have the police enforcing third-party insurance.
He said, “We as operators need to find a way of attracting people to third-party motor insurance. Beyond saying we will pay your claim, we must do things that will make people naturally want to buy the policy. So, we need to start to look at upscaling and improving third parties and looking at what more we can do. We need to make it available and ensure that they are variants.
