There’s a Nigerian driver saying, “when you’re on the road, think of everyone as a mad person”. It might be funny. On the road, it becomes not only about you, but other drivers too — even if you are the most careful driver. 

From the reckless drivers, to pothole-ridden roads to car vandalism, and even to the full car theft itself. 

Whether it’s a personal vehicle or a commercial car, having car insurance is now legally required.

Despite this, many Nigerian drivers do not have insurance , and many of those who do, do not fully understand the coverage they have. This guide is here to walk you through in less than 5 minutes. Do I have your attention?

A car insurance is a deal made between a vehicle owner and an insurer. In the case of theft or damages, the insurer  steps in to pay for hefty repairs, bills or third-party claims.

In Nigeria, car insurance is compulsory with vehicle owners mandated to have at least a Third-Party Motor Insurance policy regulated by the National Insurance Commission (NAICOM). 

Types of Car Insurance in Nigeria

1. Third-Party Only Insurance (TPO)

Required by the law in Nigeria and it covers: 

• Injury or death of other road users. 
• Damage to third-party property
• Cheapest type of insurance

• Does not cover damage to your own vehicle, theft or fire. 

2. Third-Party, Fire and Theft Insurance

This type includes all the benefits of Third Party Insurance with additional coverage for:

• Theft of your vehicle
• Fire damage to your vehicle

It still doesn’t cover accidents involving your own vehicle. 

3. Comprehensive Car Insurance

The highest level of protection covering

• All third-party issues
• Damage to your own car 
• Theft and fire
• Some policies include personal accident cover and towing services

• Most expensive option
• Premiums vary based on vehicle value and risk profile

Why You Need Car Insurance in Nigeria

•  Driving without insurance is a punishable offense.

• Insurance cushions financial blows. 
• Some policies help pay for medical bills in case of injury.
• Compensations in case of theft or vandalism. 

How to Buy Car Insurance in Nigeria

 Step 1: Compare Providers

Popular insurance companies include:

• AXA Mansard
• Leadway Assurance
• AIICO Insurance
• Mutual Benefits Assurance
• Custodian and Allied Insurance

N.B : Choose a trusted insurer with a good track record

 Step 2: Choose a Policy Type

 Step 3: Submit Required Documents

You’ll  need:

• Driver’s license
• Vehicle registration papers
• Proof of car ownership
• Valid ID (e.g., NIN, passport)

 Step 4: Pay Your Premium

This can be monthly, quarterly, or yearly. 

 Step 5: Receive Your Certificate which you must carry when driving.

What Car Insurance Typically Covers

Exclusions to insurance payments 

• Drunk driving accidents
• Using the car for commercial purposes (unless declared)
• Wear and tear
• Damage from illegal activities
• Unlicensed drivers
• Mechanical breakdowns

read the fine print before buying any policy.

To File For A Claim 

 Step 1: Report to the Police

Get a police report within 24 -48 hours.  Step 2: Inform Your Insurance Provider

 Step 3: Submit Documents

This may include:

• Police report
• Pictures of the damage or scene
• Completed claims form
• Copy of your insurance certificate
• Vehicle documents

 Step 4: Wait for Inspection

 Step 5: Receive Compensation

N.B: Only use NAICOM-licensed providers

How Much Does Car Insurance Cost in Nigeria?

Based on insurance type, driver’s history, private or commercial vehicle, the approximate costs are:

 Conclusion

Driving without insurance is risky, illegal, and costly. A few thousand naira now could save you millions later.

N.B Most insurance policies are not transferable especially after a car is sold.