Know the Law
Drivers who venture onto the road without carrying the minimum amount of coverage face big fines and up to a year of prison time. Section 68 of the Insurance Act and Section 3 of the Motor Vehicle (Third Party) Insurance Act specifically states that it is illegal to use or allow anyone else to use a vehicle unless it is properly insured against damage to third parties. The minimum amount of auto insurance in Nigeria that motorists must carry is third party motor insurance.

Know the Terminology
In the auto insurance world, a third party is defined as everyone involved in an accident except the policyholder. The first party is the policyholder, whereas the second party is the auto insurance company. Auto insurance policies may include separate bodily injury liability, personal injury protection, property damage liability, collision coverage and uninsured motorist coverage policies. Consult with a professional auto insurance agent to determine which policies are right for you.
Know the Statistics
Insurance in Nigeria is a problem. Nigerians are still adapting to the relatively new mandatory auto insurance laws. According to Nigeria’s National Insurance Institute Database (NIID), there are over 8 million uninsured drivers on the road and only about 2 million legally insured drivers. Part of the problem has to do with a lack of trust. “Our people don’t trust insurance,” an Insurance Commissioner once said. “We’ve done a considerable amount of housekeeping to make sure the companies respect the rules.”
Drive Carefully
There are many uninsured drivers on Nigerian roads. When you buy insurance in Nigeria, be sure that you tell your agent to add uninsured motorist coverage to your plan. If you lack uninsured / underinsured motorist coverage, you may end up footing the bill even if the accident wasn’t your fault. Despite NAICOM crackdowns, the percentage of Nigerian drivers who have real auto insurance coverage is still hovering around ten percent according to a report from The Guardian.
Know the Types of Auto Insurance Available
Third party insurance protects everyone else involved in a wreck, should you happen to become the cause of a car accident, but it does not cover injuries to the policy holder’s person or property. Comprehensive coverage takes care of all related expenses after an accident. Consult a qualified insurance broker or salesperson to determine which kind of coverage is right for you.
Watch Out for Scams
Since the passage of the Nigerian Insurance Act in 2003, many scam artists have cropped up offering cheap insurance plans. Beware of anyone approaching you right after completing your roadworthiness exam– the tricksters are known to operate outside of public buildings and licensing offices. Unless the insurance company is registered with Nigeria’s National Insurance Commission (NAICOM), don’t buy it.
Know the Prices
Comprehensive auto insurance in Nigeria is somewhat expensive. Premiums vary depending on your age, driving history and a host of other factors. Basic third party insurance, on the other hand, costs about N5,000.