Car Insurance and Protection For Third Party Road Users

For most Nigerians honed in on the culture of fixing their own vehicles in the event of an accident, it is worth knowing that third party car insurance is the only compulsory car insurance policy required by law.

On Nigerian roads, a day hardly goes by without vehicle owners/drivers jump out of their vehicle to quarrel, hurl abuses and in certain cases exchange blows in an effort to apportion blame and liability for damage to their vehicle resulting from a road accident. So much so that decades ago an ace musician sang a chat topper about it (you don hit my car, oyinbo repete) but sadly the trend still continues till this day.

For as little as N5,000 per annum and a willingness to be law abiding, our roads can really be rid of these daily embarrassing outbursts and fisticuffs from outraged road users.

That is all it costs most cars (though a little more for other types of vehicles) to be insured against loss, damage or injury to 3rd parties involved in a road traffic accident. In the event of such accident, third party road users (including pedestrians and passengers) are protected with up to N1,000,000.00 for personal injury or damage to property, except in the case of death where no upper limit is set and would depend on the circumstance.

The policy is made mandatory by Section 68 of the Nigeria Insurance Act 2003 which creates an offence punishable upon conviction by a fine of N250,000 or by imprisonment for one year or by both. With this in mind, the question is whether it is worth driving without insurance or driving without caring whether or not we are carrying is fake policy even when it could only cost us as little as N5,000.00 to get a genuine one?

For the peace of mind of motorists and other road users, third party insurance policies are now digitised; that is they are serialised and recorded in a national database maintained by the National Insurance Commission, the industry Regulators. At the point of purchase, a buyer of a 3rd party policy will immediately get confirmation via short messaging service (sms) that he or she has acquired a genuine certificate.

Thus law abiding motorists should now be able to go about their business knowing that in the unexpected and undesirable event of an accident, all they need do is exchange details including insurance information and then contact their insurer to notify them of the incident. Thereafter, they can go about their business and the insurance company will deal with the rest. Where one is the victim of property damage or any casualty, then a report should also be made to the nearest police station in order to obtain a police report of the incident. This will be passed on to the insurance company that will handle the claim.

As for the ability of insurance companies to pay, car owners should understand that it is no different from banks who take deposits from customers from which they lend out. Likewise, in most years, insurance companies end up paying out less than 90 per cent off all premiums they receive, just as banks do relative to depositor funds. This means that over the years, they also build reserve from funds not paid out to enable them meet huge claims whenever they arise. Consequently, motorists can be rest assured that the underlying basis for having an insurance sector is specifically to meet all no-fault claims arising from the unexpected.