Third Party Motor Insurance is required by law in Nigeria. The principal legislation on motor insurance in Nigeria is the Motor Vehicles (Third Party Insurance) Act 1945. and it makes it compulsory for cover to be arranged to cover third parties for personal injuries, death and property damage. There are four kinds of private motor policies:
Third Party Only: This covers legal liability to third parties for any damages to the property of such third parties and for any injury or death to third parties. It also covers solicitors fees for the legal representation of the insured or his driver at any judicial proceeding arising from an accident which may give rise to a claim under the policy and any other expenses of the insured authorized by the insurer, in writing.Third Party, Fire &
Theft: This policy covers all the benefits of a Third Party Only policy and further include indemnity against loss of or damage to the insured vehicle and/or accessories while thereon, caused by fire, external explosion, self-ignition or lightning, burglary, housebreaking or theft.
Act Only: This is the minimum cover required to comply with the requirement of the Motor Vehicles (Third Party Insurance) Act 1945. It covers the insured’s legal liability to third parties in respect of any injury or death to third parties and solicitors fees and other expense authorised by the insurer. It however does not include third party property damage.
Comprehensive: This is the widest type of cover motor vehicles. In addition to the cover provided by all the three types of policies mentioned above, it also covers loss or damage to the insured vehicle and its accessories, medical expense of the insured, his driver or any occupant of the insured vehicle at the time of the accident; and solicitors fees for the legal representation of the insured or his driver at any judicial proceeding arising from any accident which may give rise to a claim under the policy and any other expense of the insured authorised by the insurer in writing.
Private Car
This policy cover vehicles used by the policyholder for his social, domestic, pleasure and business purposes only and the indemnity provided is as stated above depending on the type of motor vehicle policy taken.
Commercial Vehicle
These are goods carrying vehicles (own goods and general cartage), motor trade (internal risks or road risk), hire cars (chauffer or hirer driving), buses and special type vehicles, and the indemnity provided depend on the type of motor vehicle policy taken.
Motorcycle
This policy provides cover for two or three wheeled private and commercial motorcycles (with or without sidecars). It provides indemnity against loss or damage to the motorcycle and/or its accessories: by accidental collision/overturning or collision/overturning due to mechanical breakdown, wear and tear; by fire, external explosion, self-ignition or lightning or burglary, housebreaking or theft; by malicious act; and while in transit by road, rail, inland waterway, lift or elevator.
Motor Trade
This policy is for motor traders. The scope of cover is as follows:
Internal Risk which covers damage or loss to any motor vehicle (including its accessories), property of the insured, any member of the insured’s family or household caused by accidental external and visible means and occurring in or on he specified premises, and liability to third parties in respect of all sums including claimant’s costs and expenses as a result of accidental death or bodily injury to any person other than a person in the insured’s service or member of the insured’s family or household.
Road Risks: This section covers accident, loss or damage to the vehicle (belonging to the insured or under his care, custody or control) while on the road or temporarily garaged during the course of a journey. It covers loss or damage of motor vehicles and or its accessories due to accidental collision/overturning or collision/overturning consequent upon mechanical breakdown or wear and tear, or fire, external explosion, self-ignition or lighting or burglary, housebreaking or theft. It further covers liability to third parties in respect of death, bodily injury and property damage as well as loss or damage to as well as liability arising from any vehicle insured by the policy for the purpose of being towed.
