What is Third Party Car Insurance?
Third Party Motor Insurance is the lowest level of cover you can get for your vehicle and it is mandatory by law. The policy steps in for claims arising out of damages to third parties undertaken with the policy holder's car.
Namely third party insurance protects the policy holder towards:
- claims arising from third party bodily injuries
- claims arising from third party property damages
Third party bodily damages are costs that are created when the policy holder harms an individual with its car. E.g. the insured policy holder hits a pedestrian and it is the policy holder's fault, then the medical bill of the harmed pedestrian will be paid by the policy holder's insurance company. There is usually no maximum amount of coverage associated to third party bodily damages.
Third party property damages are costs that are born when the policy holder damages third party property (e.g. another vehicle in traffic or real estate property). So in case of an accident, the policy holder is insured for damages of other cars or other properties involved in the accident. Insurance companies usually limit the amount that can be re-claimed for third party property damages to ₦1,000,000.
Heavy fines for fake policies
In conformity with the National Insurance Act 2003 (section 68), a Third Party Only Car Insurance is required as part of the minimum amount of auto cover you must carry as a car owner. Penalties for non-compliance can include a fine of up to ₦250,000 and/or 1-year imprisonment.
Traffic control has increased its activities lately in order to make Nigerian streets more secure. Authorities also use the newest electronic intelligence equipment to identify fake policies. You can visit www.askniid.com to check whether your policy is legitimate, or give us a call and we are happy to check on your behalf.
Cost of Third Party Car Insurance
Third Party Vehicle Insurance comes at a fixed price of N5,000 for privately used saloons, SUVs and Jeeps while commercially used vehicles are charged ₦7,500. Privately owned buses come at ₦7,500, whereas prices for commercially used buses and trucks differ among the insurance companies.
Third Party Insurance does not provide coverage for damages to the policy holder's own vehicle and its personal medical bill arising out of an accident. For this coverage, comprehensive insurance needs to be in place, which can be can be bought for a slight markup, starting at ₦7,500 quarterly, covering the benefits of Third Party insurance, as well as any loss occurred from car theft, fire damages, medical bill, accidential damages to the policy holder's vehicle as well as towing. We highly advise our customer to go for comprehensive as the benefits highly outweigh the costs.
Third Party Insurance Summary
- Minimum level of insurance required by Nigerian law
- Usually the lowest cost premiums
- Covers third party property damages
- Covers third party bodily injuries
- Does not cover policyholder's car damages or theft/fire
- Does not include claim bonus (discounts in the premium you get for not single claim during the term of the motor insurance policy) and/or plurality discounts (price reductions given when more than one car is insured under the same policy) may apply
- Is usually subjected to policy limits for liability