The enforcement of third-party motor insurance coverage by the Nigeria Police Power (NPF) and different regulatory businesses has sparked nationwide reactions. The directive, which formally commenced on February 1, 2025, goals to boost highway security and shield accident victims by making certain compliance with the obligatory insurance coverage coverage. Nonetheless, considerations over doable extortion, the legality of police enforcement, and {financial} burdens on motorists have led to debates over the implementation of the coverage.
Background and authorized framework
Third-party insurance coverage is the minimal stage of automotive insurance coverage required by regulation in Nigeria. It covers liabilities associated to damage, loss of life, or injury prompted to 3rd events by an insured automobile however doesn’t cowl damages to the policyholder’s personal automobile. The authorized foundation for this enforcement derives from Part 68 of the Insurance coverage Act and Part 312 of the 1945 Motor Car (Third Party Insurance coverage) Act, which mandate that each one automobile house owners should possess third-party insurance coverage earlier than working on public roads. Violations entice penalties, together with a nice of N250,000, imprisonment for one yr, or each.
Enforcement and implementation
The nationwide crackdown on uninsured automobiles is being applied by the Nigeria Police Power, the Federal Highway Security Corps (FRSC), and different related businesses. States together with Lagos, Kogi, Delta, the Federal Capital Territory (FCT), Edo, and a number of other others have commenced enforcement. Motorists discovered with out legitimate third-party insurance coverage are topic to fines or different authorized actions.
To stop abuse, authorities have emphasised professionalism and warned officers towards extortion. The Inspector-Normal of Police (IGP) has particularly instructed officers to be agency but courteous in enforcement and to keep away from any type of harassment or bribery. The police have additionally clarified that they don’t seem to be the issuing authority for third-party insurance coverage however are merely implementing current legal guidelines.
Public considerations and criticisms
Regardless of the authorized backing, many Nigerians view the enforcement as one other avenue for police extortion. A big variety of residents have expressed skepticism about how fines shall be collected and whether or not correct receipts shall be issued. Safety analysts and civil society {groups} have accused the federal government of utilizing the enforcement drive as a revenue-generation scheme reasonably than a real highway security measure.
A significant level of rivalry is whether or not the police have the authorized authority to steer enforcement. Human rights lawyer Olu Omotayo argues that the enforcement ought to be below the Ministry of Transport, not the police, which could possibly be seen as overstepping their mandate. Moreover, considerations have been raised over a number of taxation, as motorists already face quite a few levies and costs.
{Financial} implications
Beneath the brand new enforcement, non-public automobile house owners are required to pay N15,000 yearly for third-party insurance coverage, industrial automobile house owners N20,000, and industrial tricycle/bike operators N5,000. Labor unions and transport associations have referred to as for a evaluation of those charges, arguing that they impose a {financial} burden on employees and small enterprise house owners.
Moreover, small enterprise house owners and gig employees who depend on private automobiles for his or her livelihoods argue that the price of compliance is extreme when mixed with current gas subsidies, licensing charges, and highway use taxes. Many have raised considerations about how the income generated from enforcement shall be managed and whether or not it is going to translate into higher compensation for accident victims.
Authorities and regulatory responses
In response to public outcry, the police and FRSC have reassured residents that the enforcement is solely for public curiosity and highway security. The FCT Police Command has arrange a monitoring committee to supervise the enforcement course of and curb any circumstances of extortion. Moreover, state governments have urged compliance whereas highlighting the advantages of third-party insurance coverage in masking liabilities and compensating accident victims.
Insurance coverage corporations and the Nationwide Insurance coverage Fee (NAICOM) have additionally launched consciousness campaigns to teach the general public on the advantages of third-party insurance coverage. They argue that widespread compliance will finally scale back the {financial} pressure on people affected by accidents and create a extra structured compensation system.
The best way ahead: placing a stability
For the coverage to realize its full potential, sure measures should be put in place:
Public Consciousness Campaigns – Many motorists stay unaware of their insurance coverage obligations. A strong info drive by media, roadshows, and transport unions will help make clear misconceptions and promote voluntary compliance.
Clear Enforcement – The federal government should be sure that all collected fines are correctly documented and that enforcement officers are held accountable to stop abuse.
Affordability and Flexibility – A evaluation of premium charges, notably for low-income earners and industrial drivers, might improve compliance whereas easing the {financial} burden.
READ ALSO: Third-Party Insurance coverage: Kogi CP Cracks Down on Defaulters, Orders Complete Compliance
Collaboration with Insurance coverage Corporations – Simplified insurance coverage buy processes, together with digital verification programs, will help scale back the incidence of pretend insurance coverage insurance policies and be sure that automobile house owners obtain real protection.
Accountability and Compensation System – A well-structured compensation scheme for accident victims should be put in place to make sure that these affected obtain their due advantages with out bureaucratic bottlenecks.
Conclusion
The enforcement of third-party insurance coverage in Nigeria is a vital step towards highway security and accident sufferer safety. Nonetheless, considerations over police extortion, {financial} implications for motorists, and the authorized foundation for enforcement should be addressed. A clear and accountable enforcement course of, alongside correct public sensitization, is essential to making sure that the coverage achieves its supposed objectives with out turning into a burden on residents. If applied appropriately, this coverage has the potential to considerably enhance Nigeria’s highway security panorama whereas defending each motorists and accident victims alike.
