In Nigeria, third party auto insurance policy is compulsory because it protects car owners from losses caused by their cars on other people.

Third party auto insurance is designed to make an injured party “whole” as a result of a covered accident. Damage to vehicles and other property can be expensive to repair or replace, as well as the cost of medical needs resulting from an accident. If the responsible party does not carry adequate coverage, the injured party would have little choice but to pursue a lawsuit.

The Nigerian Insurance Act 2003 prescribed for compulsory Third-Party Motor Insurance in Section 68 of the Insurance Act, 2003.

Section 68 of the Insurance Act and Section 3 of the Motor Vehicle (Third Party) Insurance Act requires that no person shall use, or cause or permit any other person to use, a motor vehicle unless such a motor vehicle is insured against damage to the property of third parties.

According to the insurance law,  for a motorist to drive on Nigeria roads, it is a legal requirement to have at least third party only (TPO) car insurance in order to ensure that third parties involved in an incident are protected.

For  example, if an incident occurs and you are at fault and have to admit blame, then your insurance cover will pay out any sums of money that are granted to the people who are the ‘third party’ that may have died or been hurt or their property has been written off and  damaged.

What it covers

Third party auto insurance covers damages, especially injuries that drivers and passengers in other cars may have suffered as a result of an accident. This insurance kicks in when a policy holder is held responsible for the damage. It is referred to as third party insurance because it deals with third parties, drivers and passengers not at fault for the accident, but injured because of it. Apart from covering injuries, it will also help you pay for legal fees if any legal actions result from the accident.


Third party auto insurance is compulsory, it is particularly good for your car and will enable you to shed burden of repairing the car or taking care of other party’s bills should there be accident

It pays for damages your car cause on others and ignores any loss you personally incurred in the process.  If you have a third party insurance and your car ran into another car and deformed the door and your bonnet as well, the insurance company will only pick the bill of the loss your car caused on the other car leaving you to your fate.

What you should know

Go for third party auto insurance from a registered insurance company, with this, you will be able to save yourself the cost associated with causing damage on others. Assuming your car injured someone, the insurance company will pick up the medical bills saving you from being torn apart by the relatives of the injured.

Also, the claim you can make on an auto insurance policy is limited, so find out the limit to the loss the insurance policy covers before you subscribe.

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