In Nigeria, you can’t drive if you don’t have insurance. However, full coverage can be expensive. If you want to save money and you have enough savings to repair or replace your own car in the event of an accident, it may be wise to go with third party motor insurance.
Auto Insurance in Nigeria: Basic Insurance Terms Explained
Before we continue, let’s stop and review some basic insurance terms. In an insurance contract, the first party is the person who is buying the insurance; in other words, the first party is you. The second party refers to the auto insurance company. The third party is the other person or people involved in the accident.

What is Third Party Motor Insurance?
Third party motor insurance is much cheaper than a comprehensive auto insurance policy. The downside, though, is that it only covers the third party in the event of an accident. Any damage to your car or to your body will not be covered. Unless you have the means to pay your own way in the event of an accident, you will be stuck without a means of transportation if you opted to get the basic third party motor insurance coverage when you signed up to get insurance.
If you have a spare car and separate medical insurance that will cover the costs of hospital care if you have a road accident, third party motor insurance might be the right choice. Otherwise, you should consider spending some extra money to get comprehensive motor insurance.

What is Comprehensive Motor Insurance?
Comprehensive motor insurance covers nearly all the costs of having an accident. If you have an accident, you will get money to help cover damage to your vehicle if you are fully covered. Also if your vehicle is stolen or is so damaged that it is impossible to repair, comprehensive motor insurance will cover the cost of renting a car for a limited period of time. Some types of comprehensive motor insurance even cover towing costs, roadside assistance in the event that you get a flat tire while driving and more.
Even though the cost for comprehensive motor insurance is much more expensive compared to third party motor insurance, opting to go with full coverage may save money down the line if you ever have the misfortune of getting into an accident.

Auto Insurance in Nigeria: the Penalty for Driving Without Insurance
If you are one of the 2 million drivers who choose to get behind the wheel without auto insurance in Nigeria, you should contact an insurance agent immediately and get covered to avoid getting hit with a big punishment. According to the Nigerian Insurance Act of 2003, drivers can receive a fine of up to N250,000 and/or imprisonment for 1 year if caught on the road without insurance. Don’t risk it!