How Third Party Vehicle Insurance Works

In December 2022, the National Insurance Commission (NAICOM) announced a raise in the premium of compulsory Motor Vehicle Third Party Insurance cover for motorists from N5,000 to N15,000 with effect from January 2023.

Consequently, from January 1st 2023, the Third-Party Property Damage (TPPD) which is the limit of claims an insured can enjoy on a policy for private vehicles has now been increased to N3 million for the new premium of N15,000. While the limit for own goods has been increased to N5 million, with a new premium of N20,000. Insurance premium rate payable on staff buses is now N20,000 and its TPPD would be N3 million.

Thus, motorists need to understand how Third Party Insurance works.

Driving is an unpredictable activity. One minute you are cruising, enjoying the luxury of your car, and the next, a little distraction causes you to crash into another vehicle. Depending on how serious the crash is, it could result in car damages and bodily injuries where you have to bear the cost of repair or foot the hospital bills. This is where having third-party insurance makes the difference.

Why should you have Third Party Insurance?

In Nigeria, every driver must obtain Third Party Insurance to drive legally. This is the minimum insurance requirement for every motorist in Nigeria. The intent is to ensure that other road users get reasonable compensation (indemnity) for damages to vehicles or injuries caused in the event of an accident.

Should your action on the road result in an accident, the victim (third party) – who could be the driver or passenger(s) – will receive compensation for injuries as well as damage to the vehicle.

However, these benefits do not include compensation for your own damaged vehicle or personal injuries suffered during the accident. It is crucial to note that driving without any auto insurance cover in Nigeria is against the law and will attract a penalty.

What exactly are the benefits of Third-party Car Insurance?

So, how do you benefit when the victim gets compensated? Here are some of the benefits:

Takes Care of Unplanned Expenses

Besides being on the right side of the law, Third-Party Vehicle Insurance protects you from unplanned financial exposures to legal liabilities resulting from being sued by the victims of an accident you caused.

Get Covered up to N1 Million

The Leadway Assurance Third-Party Vehicle policy provides a maximum cover of up to 1 million Naira for the victim’s damaged vehicle and costs just N5,000/per year.

Unlimited Cover for Bodily Injury

Leadway also provides an unlimited cover for bodily injury or death of a third party.

How do I get valid Third-Party Vehicle Insurance?

The number of vehicles with fake certificates on Nigerian roads has risen to 9.4 million. The Nigeria Insurers Association revealed that only 2.72 million vehicles have valid insurance covers as of February 2021.

These fake insurance certificates result from purchasing from unauthorized agents. But Leadway Assurance is changing that by bringing insurance closer to motorists.

As a motorist, you can opt for any of our auto insurance options- from Third-party insurance to our hybrid Auto Base Insurance and even a Comprehensive insurance policy that provides all-around cover -not only for damages to the third-party but also damage to you and your vehicle in the event of an accident.