If you drive in Lagos, Abuja or Port Harcourt, you have probably noticed more police and FRSC officers asking for vehicle papers. Among the documents they ask for, the one many motorists cannot produce is a valid certificate of car insurance in Nigeria. Since early 2025 the push to enforce compulsory third-party motor insurance has grown, and the rules have become heavier under the Nigerian Insurance Industry Reform Act 2025 (NIIRA). This guide explains what you must have, what it costs, what it covers, and how to avoid fake policies.
What changed: the enforcement push
According to The ICIR, enforcement of third-party motor insurance began on 1 February 2025 under a directive from the Inspector General of Police, Kayode Egbetokun, with police commands told to ensure compliance nationwide. In October 2025, the FRSC and the National Insurance Commission (NAICOM) inaugurated a Joint Task Force to enforce compulsory third-party insurance, using data sharing between both agencies’ databases and technology-driven enforcement, based on a statement by FRSC spokesman Olusegun Ogungbemide reported by the News Agency of Nigeria.
The practical meaning: your insurance status is no longer something only a roadside officer checks by eye. As databases are linked, an uninsured or fake-certificate vehicle is easier to flag.
What is third-party insurance?
NAICOM describes third-party cover as the minimum coverage compulsorily required by law for any vehicle on the road. It does not repair your own car. It protects other people and their property if you cause an accident. Per NAICOM, as reported by The ICIR, a third-party policy covers:
- Repair or replacement of a third party’s damaged property, up to N3 million.
- Limited medical care for injured third parties.
- Compensation to the family of a third party who dies.
- Cover for trips within West Africa under the ECOWAS Brown Card scheme.
Analysis of the NIIRA 2025 provisions adds that policies must cover third-party medical expenses (N100,000 for in-patients and N250,000 for out-patients) and that vehicles carrying passengers for hire must insure passengers against death or bodily injury. The obligation now applies to anyone with effective control or operational responsibility for the vehicle, not only the registered owner, according to a Mondaq legal review.
How much does it cost?
NAICOM raised the private-car third-party premium to N15,000 per year in December 2022, and the ICIR still cites N15,000 annually for private car owners. Commercial vehicles pay different rates depending on vehicle type. Treat these as reference figures only; some insurers add admin or delivery charges, so ask for the full price before paying.
For fuller protection, insurance expert Modestus Anaesoronye told The ICIR that comprehensive insurance costs roughly 5% of the car’s value per year, while a “third-party plus” extension can cover damage to your own car up to about N750,000. A quick example of the 5% rule of thumb (an estimate, not a quote): a car worth N8 million would imply roughly N400,000 a year for comprehensive cover, versus N15,000 for basic third-party.
Quick comparison
- Third-party: about N15,000/year for private cars; covers others, not you. Legal minimum.
- Third-party plus: a middle option; partial cover for your own car (about N750,000 cited).
- Comprehensive: roughly 5% of car value yearly; covers your car plus third parties. Optional, but it already includes third-party cover.
Penalties for driving uninsured
Figures differ between sources, which is itself a reason to check. A Mondaq review of NIIRA 2025 reports a fine of up to N250,000, up to 12 months’ imprisonment, or both for driving without insurance, with higher fines for repeat offences, and notes the limitation period for motor insurance offences extended from 6 to 12 months. The older Motor Vehicles (Third Party Insurance) Act carried tiny fines, and a conviction can also disqualify you from holding a driving licence for at least 12 months unless a court orders otherwise. Because reports on the exact penalty wording are not fully consistent, confirm the current figure with NAICOM or the FRSC.
Police and other law enforcement officers can demand a certificate of insurance, and under NIIRA it may be shown in print or electronic form, per the same legal review. Keep a screenshot or PDF on your phone as well as a printed copy.
How to buy genuine cover
- Use only NAICOM-licensed insurers. NAICOM says policies must come from licensed companies. Check the insurer’s licence before paying.
- Avoid roadside “insurance” sellers. Fake certificates are a known problem. A fake paper can leave you uninsured after a crash and still exposed to penalties.
- Verify the certificate. Confirm that the policy number, vehicle chassis number and plate number match your car.
- Buy through your bank, a broker or the insurer’s official channel and keep the payment receipt.
- Know the complaint route. NAICOM operates a Complaints Bureau for disputes with insurers over service or claims.
Tokunbo and newly imported cars
If you are buying a tokunbo car, include insurance in your budget alongside duty, clearing, registration and a roadworthiness check. A car that looks cheap on the lot but needs immediate cover, plates and repairs can cost far more than the sticker price. Ask the dealer for proof of ownership and registration first, since an insurer will need your vehicle details. If you are financing the car, lenders usually require comprehensive cover for the loan period, so budget for that rather than just the minimum.
Who is most affected?
Commercial drivers, ride-hailing operators and bus owners face the highest exposure because passenger-carrying vehicles must also insure passengers under the new law. Fleet owners should review every vehicle’s papers at once rather than waiting for a roadside stop. Private owners who have let a policy lapse for years are the other big group: renew before an officer asks.
Is comprehensive worth it?
It depends on your car’s value and where you drive. For a car worth several million naira in a busy city with frequent accidents and theft risk, comprehensive cover can be worth the cost. For an older, low-value car, third-party plus can be a middle ground. Compare at least three insurers, ask about excess (what you pay on a claim), and read the exclusions on flood, riot and theft.
Key takeaways and FAQ
Key takeaway: third-party insurance is the legal minimum, costs about N15,000 a year for private cars per NAICOM, and enforcement is tightening, so buy only from a licensed insurer and carry proof.
Is third-party insurance compulsory in Nigeria?
Yes. NAICOM calls it the minimum cover required by law for any vehicle on the road.
Does third-party insurance cover my own car?
No. It covers other people and their property. For your own car you need third-party plus or comprehensive.
Can I show an electronic certificate?
Under NIIRA 2025, the certificate may be presented in print or electronic form, per a legal review. Carry both.
Where can I report an insurer?
NAICOM’s Complaints Bureau handles disputes over service and claims.
Disclaimer: vehicle prices, import duties, insurance premiums, penalties and specs change frequently in Nigeria. Always confirm current figures with the insurer, dealer or official source (NAICOM, FRSC) before buying.
