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  You just bought a brand-new Black Toyota Corolla 2020. Your friends and family gather to celebrate with you and to ‘wash the car’. One of your friends collects your car keys, jumps into the vehicle and zooms off. 15 minutes later you receive a distress call from him that there has been an accident and your brand new 2020 Toyota Corolla has just crashed. One of your friends walks up to you and asks, “you have an insurance cover for it, right?” but it happens you have none. He looks at you knowing that you have just lost a car and a friendship.
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God forbid, right? I am no devil’s advocate, but let’s face it, accidents do happen. And it is best to be insured and pray it doesn’t happen, than to not be insured and it happens. So, in this article, I will help you understand more about the 3 major types of insurance policies available for your vehicle in Nigeria.

Third-Party Vehicle Insurance 

This is the commonest type of insurance cover available and it is the one compulsorily required of you to take out under the Nigerian laws. This type of insurance takes care of all damages your car may cause other persons other than you, in the course of you driving the vehicle within Nigeria. Damages here include vehicular damages, property damages, and bodily damages, if the third party sustains injuries requiring hospitalization. It also takes care of payment of compensation to the third party’s family in the occurrence of death. As stated earlier, this type of insurance cover is basic when it comes to vehicle insurance, and also it is compulsory for all vehicles operating in Nigeria. What this means is that, when you operate your vehicle without at least this type of insurance cover, you may be required to pay some penalties. This type of cover starts from as little as NGN 5,000 per year. So, you have no excuse not to have your car insured.

Comprehensive Vehicle Insurance 

Just as the name suggests, this type of insurance goes beyond the provisions taken care of by third-party insurance to provide more comprehensive protection for you, your car and third parties in the event of an accident. It takes care of such losses as an accident (fire and collision), theft, and vandalism. In the event of bodily injuries, it also takes care of the cost of your hospital bills (for you and the third party) and in the event of death, it takes care of compensation to your family members or the third party’s.
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ECOWAS Brown Card Vehicle Insurance 

Realizing the geographical limitations of the above two insurance covers, the Head of States and Governments of the Economic Community of West African States (ECOWAS) on 29th May 1982, signed the Protocol A/P1/5/82 establishing the ECOWAS Brown Card Insurance Scheme. This type of insurance takes care of compensation for damages that may occur on third parties caused by a vehicle travelling from other ECOWAS member states. For instance, you drive your car from Nigeria to Ghana and it gets involved in an accident, this type of insurance will take care of such damages.

Other Types of Vehicle Insurance Covers

Aside from the above named three insurance covers, there are other insurance covers designed by some companies to meet the needs of their customers. They are not as common as the ones mentioned above, and are simply modified from a combination of two or sometimes three. You can find out from your insurance company about these offerings. For instance, Leadway Insurance Company has what it calls Third Party Auto-base. According to their website, their Third-Party Auto Base covers everything a third party motor insurance policy covers, as well as a partial cover on damages to your vehicle to the tune of ₦250,000.


There you have them. The 3 major vehicle insurance covers are available for you to choose from. As also pointed out, there may be other forms of vehicle insurance packages an insurance company may have available. Ask questions about these and choose according to your needs and pockets. Featured Image Source: Goodlife Automobiles
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This article was first published on 22nd January 2022


Ifegwu-Mbonu Victor is a Personal Growth and Leadership Trainer who provides training and coaching to individuals and organizations.

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