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Section 68 of the Insurance Act (2003) makes it a criminal offence not to have a motor vehicle third-party insurance policy, and the penalty for non-compliance is imprisonment for one year, a fine of N250,000 or both.
One does not leave home expecting to get into an accident. Regardless, roads are unpredictable—one moment, everything is fine, and the next, you are exchanging words with another driver over a dented bumper. That is a mild scenario.
Now, think about something worse—a pedestrian gets injured, a motorcycle rider is knocked over, or your car collides with a luxury vehicle whose repair costs run into millions.
Suddenly, it is not just about scratches and apologies; it is about medical bills, legal trouble, and financial strain.
When faced with such situations, you would wish you had a saviour at that instant. As the saying goes, “It is too late to shut the stable door after the horse has bolted.” In other words, last-minute regrets will not save you from the consequences.
What will?
Preparation, which is precisely what third-party motor insurance gives you. You get the confidence that if something goes wrong, you have a financial buffer in place.
At Coronation Insurance’s recent webinar, the keynote speaker shared key insights on third-party motor insurance: its legal importance, the consequences of non-compliance, and the financial protection it offers.
Building on his insights, the following sections of this article will break down everything you need to know about third-party motor insurance—what it covers, how to make a claim, and why it is a smart choice for every vehicle owner.
What is Third-Party Motor Insurance?
Third-party motor insurance is a financial shock absorber. It does not stop accidents from happening, but when they do, it softens the blow, at least for the other party.
This type of insurance covers damages and injuries you cause to others while driving. If you hit another car, knock down someone’s fence, or accidentally injure a pedestrian, your insurer handles the cost—up to the policy’s limit.
So, while third-party insurance keeps you on the right side of the law, its real value is in shielding you from expensive claims that could drain your finances.
The Legal Implications of Driving Without Third-Party Motor Insurance
There’s a common saying: Ignorance of the law is no excuse. If you drive without valid third-party motor insurance, claiming you didn’t know won’t get you off the hook
Section 68 of the Insurance Act (2003) makes third-party motor insurance mandatory for every vehicle on the road.
It is not just a box to tick—it carries real consequences. Since February 1, 2025, the Nigeria Police Force has ramped up enforcement, meaning compliance is being closely monitored.
Here’s what that means for you:
● Frequent stop-and-check operations are in full swing: Law enforcement officers are actively verifying insurance coverage during routine roadblocks and random checks. If you can’t provide valid proof, you may not be allowed to continue driving.
● The penalties are severe: If you are caught without third-party insurance, you could face a fine of N250,000 up to one year in prison, or both. This isn’t just a warning—offenders are already being penalised.
● No valid insurance? You could be in legal trouble: Beyond fines, authorities now have the backing to take immediate action. Your vehicle could be impounded, and getting it back may involve additional costs and legal hurdles.
Having third-party motor insurance helps you avoid penalties and also protects you financially. You can enjoy both at a very affordable yearly premium, so why wait?
What Does Third-Party Motor Insurance Cover?
When an accident happens, someone has to pay. If you are at fault, that someone is you—unless you have third-party motor insurance. Here is what it covers:
● Injuries or death of third parties.
● Damage to third-party property.
This coverage keeps you from unexpected financial burdens while ensuring those affected do not suffer losses because of your vehicle.
What Third-Party Motor Insurance Does Not Cover
While third-party motor insurance offers solid protection, it has limits. You will not be covered if:
● You were driving under the influence of alcohol or drugs.
● Your driver’s license was invalid.
● An underage driver was behind the wheel.
● The vehicle was used for illegal or commercial activities.
● The vehicle was stolen at the time of the accident.
Exclusions exist to prevent fraud, reckless driving, and misuse of policies. They also highlight why responsible driving is just as important as having insurance, you need both to stay protected.
How to Make a Claim on Third-Party Insurance
Accidents happen. When they do, knowing how to file a third-party motor insurance claim can save you time, money, and frustration. So, what’s the process? What documents do you need?
Let’s break it down.
Step 1: Report the Accident Immediately
The first thing you need to do is notify your insurance company. Most policies require you to report an accident within a specific timeframe, so don’t delay. You also need to file a First Information Report (FIR) at the nearest police station, especially if there are injuries or significant damage.
Step 2: Gather Essential Information
To file a claim, you will need:
A detailed description of the accident – Include the date, time, and location.
Insurance details – Provide your policy number and details of the other party’s insurance.
Injury and damage reports – Describe injuries sustained by drivers, passengers, or pedestrians, as well as damage to vehicles or property.
Witness statements – If there were bystanders, their testimonies can support your claim.
Weather and visibility conditions – This helps establish fault and context.
Photographic evidence – Take clear pictures of the accident scene, vehicle damage, and any injuries.
Police report or FIR number
Step 3: Submit Your Claim
Once you have all the necessary information, you will need to:
Fill out the claim form – This can be done online or at your insurer’s office.
Attach all supporting documents – Include photos, police reports, and witness statements.
Cooperate with the insurance company’s investigation – A surveyor may be assigned to assess the damage.
Step 4: Wait for the Claim to Be Processed
Your insurer will review the details, verify the damages, and determine the amount payable.
If everything checks out, the compensation will be paid directly to the affected third party or their service provider.
What If the Accident Wasn’t Your Fault?
If another driver caused the accident, you can file a claim against their third-party insurance for:
Vehicle repair costs
Medical expenses
Compensation for loss of use (e.g., car hire costs while yours is being repaired)
Having third-party motor insurance protects you from liability, but knowing how to file a claim properly ensures you don’t end up paying for damages that your insurance should cover.
Get Affordable Protection with Coronation Insurance
N15,000 a year, gives you the security of third-party motor insurance.
This is a legal requirement that also spares you from unexpected financial burdens.
With this coverage, Coronation Insurance takes care of:
● Third-party property damage, and covers up to N3 million in settlements.
● Injuries or fatalities, so that compensation is provided where necessary.
Instead of facing out-of-pocket settlements or legal penalties, having third-party insurance means you are prepared for the unexpected.
Conclusion
When people think about insurance, they often see it as just another requirement—something to tick off the list alongside vehicle registration and roadworthiness certificates.
But step back for a moment, and you’ll see that insurance is actually a financial tool, not just a legal obligation.
Think about it: every financial plan accounts for savings, investments, and expenses.
Yet, the cost of unforeseen events—accidents, liabilities, or even lawsuits—is rarely factored in.
That’s where insurance fits in. It’s not just about covering damages; it’s about protecting your finances from unpredictable disruptions.
Coronation Insurance makes this protection simple and accessible.
Our easy claims process, expert support, and reliable coverage give you all the confidence you need in the face of unexpected events.
Have questions or need to get started? Email us at info@coronationinsurance.com.ng or call 02-01-2275475 | 02-01-2275476.
