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LIFE INSURANCE IN NIGERIA: All you need to know!



LIFE INSURANCE IN NIGERIA: All you need to know!


Insurance is really an interesting plan that caters for every financial needs of an individual. This is achievable only when an individual transfer some risks associated with living to the insurance company.

Whilst many has adopted the habit of insuring their valuables to avoid or limit financial loss; ranging from cars, Luxury Gadgets, Houses, Businesses amongst others, Many still find it hard to insure the most necessary aspect which has made the achievements of the  aforementioned materials (valuables) possible.

Human life is the most and crucial part of Insurance. Without the protection of life, in form of an insurance cover, many of the things an individual has achieved might suffer mishandling, or even be  transferred to the wrong hands.

While it is common to see people insuring their cars , houses, costly automobiles amongst others, you hardly find substantial number of people taking a bold step to insure their life. So I decided to make enquiries into why this is so. And I was surprised to find out that it is because many people see life insurance as a death sentence especially in Nigeria.

But life insurance is far from this; hence this article seeks to throw more insights and give more information on what life insurance is, and how it is the most crucial aspect of every insurance in Nigeria.





First of all , Life Insurance is not a death sentence as thought by many. Rather; Life insurance simply refers to the insurance that provides coverage for an individual life that is insured in terms of financial benefits whilst alive, and even in death.

Life insurance provides funds to compensate you when you lose an aged Father, Mother or Uncles amongst others, as well as the loved ones of any breadwinner of the family who encounters premature demise.

Life insurance is the type of insurance that help ensure that human life is not a liability but rather an asset. Knowing that human life is very fragile and that life is full of uncertainties, with a life insurance cover, the associated liability that might ensue at ones demise is totally avoided or better still turned into an asset.



How Human Life outside of Insurance Can Become A Liability


Human life as is well known, is very fragile, hence when a man dies , a financial obligation usually ensue. But when the demised life has no form of life insurance cover, the survivors of the deceased now bears the burden of utilising their income set aside for other needs, to cater for the funeral expenses, and in most cases; those who had no savings at all end up incurring debt through loans so as to do the needful at that point in time – this is a typical example of how human life has become a liability for those he/she left behind. This is common amongst the middle class and poor class folks.


How Human Life With An Insurance Can Become An Asset


An asset is something that at least brings you some amount of ease and profit. Hence, with the knowledge that when a man dies, it automatically means that the breadwinner is dead, the husband is dead, the person we call father is dead, and the income dies; all these in one way or the other has its repercussion on the survived lives. But then, these repercussions that would have ensued, can be translated to asset and therefore be mitigated…


You Ask How? Read on…


With life insurance you can get assurance for; Food, Shelter, Education, Prestige, Dignity, amongst other needs of life. Hence, when an individual buys a life insurance cover as protection for his/her life, and along the line passes on prematurely, the life insurance company will make available funds in terms of compensation that will act as that support the breadwinner had previously been providing to the family before his untimely demise.

And  thereby affording the family to keep having the lifestyle they’re used to in terms of food, shelter, education, and prestige. In most cases the benefits derived(dead or alive) from subscribing to a life insurance is usually higher than what an individual invested in terms of premium payments. Hence the profit or benefits derived is higher than the invested premium.





In life insurance as well as other form of insurance, there is nothing as such as generic coverage. Rather, each plan you decide to go for has its scope of coverage and all; hence the need to always confirm what a particular policy covers and the degree of coverage.

Therefore, in life insurance there are different benefits attached to diverse life insurance policies. Some are Death benefits while others are  benefits one can enjoy whilst still living.

Some of the insurance companies in Nigeria like; Enterprise Life Assurance, has some benefits that one can enjoy in their whole life insurance policy. This means that it is not only In death that an individual gets to enjoy the  benefits in insurance.


For example;

  • There is the benefits of Ten percent (10%) cash back every two years of total premium paid. And this doesn’t affect your total sum assured selected.
  • There is also the benefits of adding a cash account to the plan which earns you six percent (6%) interest on the savings. And you can leverage on this funds to invest into real estate deals and have your money grow without tax deductions.
  • There’s a monthly premium holiday by which you don’t pay premium every January of the year. This also serves as a way of making you enjoy your money in that month while still retaining your coverage.
  • In case critical illness, life insurance plan will enable you with the needed funds to cater for the medical treatment.





There are three types of life insurance in Nigeria. They are;

  1. Whole life insurance plan.
  2. Term life insurance plan.
  3. Endowment plan.




This type of insurance plan provides coverage throughout the lifespan of the insured. And payout is only triggered when death occur (death benefits), while some companies also payout after the year specified matures (maturity benefits).

However, this plan also has a saving account called “Cash Account” which gives you the opportunity to accumulate cash value with interest.

The funds in the cash account can be accessed while the individual is living, and channeled into other businesses or investments; such as real estate and stocks. Premium paid on this plan is usually fixed, as well as the sum assured that will be paid out, except of course an individual added some riders, which enables you to enjoy more benefits with increase in premium paid as well.





This type of life insurance plan only provide coverage for life for as long as the specified duration of years. Usually between Ten to forty-five years (10-45 years).

Hence, once nothing happens between the specified years, no sum assured will be paid to the individual. Except of course he has successfully enjoyed the peace of mind within those years. The event that will trigger payout has to happen within the years specified in this contract before an individual receive his/her benefits.

This is why it is advisable when picking a term life insurance, to pick a longer years cause nobody knows what will happen and it is safer that way than opting for few years.

In Nigeria, the term life insurance premium is higher to compare with the whole life insurance premium. As well as the sum assured in the plan.

As with the whole life insurance, the term life insurance also has a cash account which one can save and accumulate cash value with interest on it.




Have you encountered a scenario where an insurance company is pitching an education plan for you and you are wondering why that is happening? I’m sure you have. Well that’s what endowment plan caters for amongst others.

An endowment plan affords you the opportunity for you to finance a particular goal or education plan of a loved one. This offers you a life cover as well as savings and investment plan for any dream or project of yours. You can actually pick up an educare plan with Enterprise Life Assurance company to enjoy this benefit.

The good thing about this their endowment plan especially the educare plan, is that if along the line of the policy term, an individual suffers premature death, the education goal that was intended for the loved ones won’t be halt. As this company will continue paying the premium on the deceased behalf to ensure that the child completes his/her school.

There is also other savings plan under the endowment policy plans and many companies call it different names. So you can actually ask a life planner to guide you as to how to go about it if you chose to buy an endowment plan.

Another good aspect of this savings plan with a life cover is that, you stand to earn interest in the savings plan selected..





You know that in property coverage; be it motor, house, business, amongst others, you cannot cover them twice. Cause it’s against the principle of indemnity in insurance. But when it comes to Life insurance, you can actually have twice or more coverage for one life if you can afford to pay the premium.

Reason is because, Life insurance provides compensation when a negative even occur, and being that human life can’t be quantified, and no amount of money can bring back a deceased soul that was lost back to life, hence the need for an individual to purchase more coverage he can afford as long as it’s in life insurance. Hence, the need to  plan for the worst and expect the best! One can then use life insurance as a solid financial foundation on which wealth can be built.






Below are some of the features in life insurance, they are;


  • The tenure is between 5-years and above
  • The premium payable differs by the type of plan opted for, as well as the benefits to be enjoyed.
  • The contract is usually issued in the name of the policy holder who paid for the plan.
  • Payout is triggered when death occurs, or at the maturity of the plan.
  • You can cover yourself twice or more as well as any loved ones.
  • Life insurance also has savings and investment account that accrue interest called cash account as one of the riders.




  • With life insurance cover, you enjoy peace of mind; Living in anxiety or fear of tomorrow is the worst kind of nightmare, especially when you want everything taken care of for your family. But with an insurance cover, that anxiety automatically disappears, knowing that those who depend on you won’t suffer if something goes wrong.
  • It gives protection to the lives of many you care about.
  • Life insurance can help replace income for you in case of total permanent disability or critical illness.
  • Life insurance can serve as the most effective way of leaving behind a “will”. Seeing the beneficiaries nominated can’t be contested.
  • With life insurance, educational expenses of our children can be assured for years without disruption.
  • With life insurance, you can cover the lives of your immediate family and extended family who are above 76 years ( enterprise life whole life insurance plan does this). And stand the chance of giving them a befitting burial after they have lived a complete life.
  • With a life insurance, you stand the chance to avoid tax payment as a benefit. So the sum assured payable aren’t taxable.
  • Life insurance endowment plan can act as a back up source of retirement income. As one can’t have enough of retirement income, seeing the cost of living are not fixed, and the time value of money in the near years ahead won’t be the same with money deposited already.
  • As a business, Having a life insurance as part of employee benefits, will help your business retain resourceful and capable employees that will help pilot your business to great heights.





Life is full of uncertainties, and human life is fragile; anything can happen at any time. And it is with life that an individual can acquire every other properties and luxuries of life, hence the need to pay more attention to life insurance policies before buying other plans that covers our properties. No one knows what the future holds. Hence, in as much as we expect the best out of life, it is always safer to plan ahead for the worst. This can happen by just simply walking into an insurance company and getting a life cover today, or better still reach out to a life planner to help you out.

I will leave it at this then; Life insurance is the solid financial foundation on which the wealthy individuals builds their financial home. And the best time to buy it was yesterday, the next best time is NOW! Cause tomorrow is not promised!



















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The Impact of Supply Chain Disruption on Business Operations and Financial Performance 




The Impact of Supply Chain Disruption on Business Operations and Financial Performance

Supply chain disruptions are very commonplace in today’s interconnected global economy, affecting organizations in a variety of industries. These interruptions may have far-reaching effects on a company’s financial performance in addition to its commercial operations. In addition to offering techniques to reduce the risks involved, this article seeks to give readers a thorough grasp of how supply chain interruptions affect corporate operations and financial performance.


Any incident or event that prevents information, services, or items from smoothly flowing through the supply chain network is referred to as a supply chain disruption.

It describes any situation or incident that stops the movement of products, services, or data inside a network of supply chains. These interruptions may happen at any time during the supply chain, from suppliers of raw materials to final consumers, and can lead to disruptions, shortages, higher expenses, and eventually affect the chain’s overall effectiveness and performance.

Disruptions to the supply chain can be divided into two categories: internal disruptions that occur within the company and external interruptions that occur outside the company.


Disruptions to the supply chain can come from a variety of sources and take many different shapes. Typical forms of supply chain disruptions include the following:

  1. Natural Disasters: Incidents like hurricanes, floods, tsunamis, and wildfires can cause damage to transportation networks, destroy infrastructure, and force the closure of manufacturing and distribution facilities.
  2. Geopolitical Events: The movement may be impacted by trade disputes, tariffs, sanctions, war, terrorism, political instability, and changes in governmental policy. moving commodities across international borders, sour commercial ties, and cause bottlenecks in the supply chain.
  3. Supplier Issues: Delays in the delivery of components or raw materials might result from issues with suppliers, such as bankruptcy or sudden changes in production capacity.
  4. Transportation Disruptions: The supply chain as a whole may be impacted by delays in the delivery of goods caused by strikes, fuel shortages, accidents, port congestion, and other transportation-related problems.
  5. Demand Surges or Drops: Unexpected fluctuations in customer demand, such as sudden increases in orders or decreases in sales, can result in mismatches between supply and demand, which can cause delays in manufacturing and delivery.
  6. Cybersecurity Breach: Information technology system malfunctions, cyberattacks, or data breaches can impair critical data, interrupt the flow of products and services, and offerings.
  7. Quality Control Issues: Recalls, manufacturing halts, and supply chain interruptions may result from issues with product quality, safety, or compliance.
  8. Pandemics and Health Crises: Situations like the COVID-19 pandemic can result in worker shortages, manufacturing closures, travel restrictions, and interruptions to international supply chains.


Disruptions to the supply chain can have a big effect on how businesses operate, impacting many different parts of what they do. Among these effects are the following:

  1. Production Delays: Supply chain disruptions may cause delays in the delivery of components, finished goods, or raw materials, which may cause production to halt or slow down. This may affect a business’s capacity to reach production goals and promptly complete orders from customers.
  2. Increased Costs: Expenses associated with carrying excess inventory, accelerating shipments, finding alternate suppliers, and putting emergency plans in place can all rise as a result of supply chain interruptions. These extra costs have the potential to weaken profit margins and lower overall financial performance.
  1. Customer Dissatisfaction: Customers may become dissatisfied and lose faith in the business as a result of delays in the delivery of goods or services. Customer loyalty and the company’s reputation may suffer as a result.
  2. Inventory Management Problems: Disruptions in the supply chain may result in inventory levels that are out of balance, with an abundance of certain commodities and a deficiency of others. This may result in ineffective inventory management, a lockup in working capital, and higher carrying costs.
  3. Operational Disruptions: When important vendors or partners in logistics are unable to deliver merchandise services as anticipated, it may cause daily operations of a business to be disrupted, affecting departmental productivity and efficiency.
  4. Risk of Loss of Market Share: Prolonged supply chain interruptions increase the likelihood that a company may miss out on sales opportunities, lose market share, and experience other negative effects. Those with more dependable supply chains could have an advantage over rivals.
  5. Legal and Regulatory Issues: When a supply chain is disrupted, there may be legal repercussions, including breaking contracts, missing deadlines, and breaking rules. Legal issues, fines, and reputational harm to a business may arise from this.
  6. Long-term Business Impact: A company’s financial performance, competitive position, and general viability may all be negatively impacted by protracted or severe supply chain disruptions. It might impair the business’s capacity to sustain connections with clients, vendors, and other business associates.
  7. Communication and Collaboration Challenges: Interruptions can make it difficult for supply chain participants to coordinate, make decisions, and solve problems. Both efficient crisis management and general operational efficacy may be hampered by this.


A company’s financial performance can be significantly impacted by supply chain disruption in a number of ways, including:

  1. Increased Expenses: Supply chain interruptions frequently result in greater expenses for items like faster shipment, purchasing from more expensive alternative suppliers, keeping extra inventory on hand, or putting emergency preparations in place. The company’s profitability may be directly impacted by these added expenses.
  2. Revenue Loss: Supply chain disruptions may cause delays in completing client orders, which may result in a potential loss of revenue because lost chances to close deals. If there are delays or product shortages, customers can also look for other suppliers, which would mean fewer sales for the business.
  3. Inventory Write-offs: When there are disruptions in the supply chain, inventory levels might become unbalanced, with certain items having excess stock and others lacking. As unsold or outdated inventory builds up and negatively affects the company’s financial condition, this may lead to inventory write-offs.
  4. Contractual Penalties and Legal Expenses: If supply chain disruptions cause a party to miss contractual obligations, there may be penalties and legal expenses. Conflicts involving partners, suppliers, or customers may lead to legal action and more expenses.
  5. Long-Term Financial Impact: Extended or severe disruptions to the supply chain may have a long-term effect on the financial performance of the business, limiting its capacity to produce revenue and sustain long-term profitability. Stock performance and investor confidence may potentially be impacted by this.
  6. Working Capital Restraints: In order to minimize disruptions caused by supply chain disruptions, the business may need to store excess inventory or pay in advance for faster transportation. Money that may have been spent for other company endeavors is diverted by this.
  7. Business Continuity Costs: In order to avoid or lessen supply chain interruptions, businesses may need to make investments in business continuity and risk management techniques. These costs can have an adverse effect on their bottom line.
  8. Stock Market Reaction: When businesses see significant interruptions in their supply chains, investors may react negatively, which could lead to a drop in stock prices. The market capitalization of the company could be impacted if investors lose faith in its capacity to handle risks.
  9. Legal and Regulatory Repercussions: Disruptions to the supply chain may result in legal and regulatory repercussions, such as breaking contracts or neglecting to fulfill duties to customers. A company’s reputation and financial performance can be severely impacted by lawsuits, fines, penalties, and compliance expenses.


Businesses can handle supply chain disruption and reduce its impact on operations and financial performance by implementing a number of mitigation techniques, such as:

  1. Diversify Your Supplier Base: Dependence on only one source might make disruptions more likely. Increasing the variety of suppliers helps lessen the effect of interruptions from a particular source.
  2. Supply Chain Insight: Put in place systems and technology that offer real-time insight into every aspect of the supply chain, including transportation, production status, and inventory levels. This visibility aids in identifying anticipate possible problems and make proactive mitigation strategies possible.
  3. Risk Assessment and Management: Perform thorough risk analyses of the supply chain to find possible weak points and put risk management plans in place to lessen their effects.
  4. Contingency Planning: To handle and minimize supply chain interruptions, create and update backup suppliers, logistics routes, and alternate sourcing choices.
  5. Cooperation and Communication: Create effective channels for cooperation and communication with consumers, logistical partners, and suppliers. Having solid connections and open channels of communication will make it easier to deal with interruptions in a cooperative and efficient manner.
  6. Inventory Management: Use agile inventory management techniques to balance supply and demand, keep ideal inventory levels, and lessen the effects of shortages and surpluses brought on by disruptions.
  7. Adoption of Technology: Invest in Supply chain resilience and agility can be improved by utilizing technology like blockchain, supply chain management systems, and predictive analytics.
  8. Financial Risk Management: To lessen any financial effects, assess your exposure to financial risk as it relates to supply chain interruptions and take into account risk transfer strategies such supply chain insurance.
  9. Technology Adoption: Supply chain visibility, traceability, and control can be improved by utilizing cutting-edge technologies like blockchain, data analytics, automation, artificial intelligence, and the Internet of Things (IoT). By facilitating real-time monitoring, predictive analytics, and prompt decision-making, these technologies improve resilience and lessen the effects of disruptions.
  10. Scenario Planning: Create and maintain scenario plans that take into account a range of possible interruptions and how they can affect financial performance and business operations.


Disruptions in the supply chain significantly affect financial results and commercial operations. Companies need to proactively identify risks, improve teamwork, use technology, and create strong contingency plans in order to successfully traverse these issues. Businesses may reduce the effects of disruptions, enhance financial performance, and preserve a competitive edge in the complex and unpredictable business world of today by putting these mitigation techniques into practice.

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Vehicle Insurance: Everything You Need To Know




Vehicle Insurance: Everything You Need To Know

Getting behind the wheel is a daily necessity for many of us, but it comes with its fair share of uncertainties. Accidents, theft, and unforeseen mishaps are part and parcel of the road. That’s where vehicle insurance steps in as your trusted safeguard.

In this comprehensive guide, we’ll walk you through everything you need to know about vehicle insurance, from the basics to the finer points, so you can hit the road with confidence and peace of mind.

What is Vehicle Insurance?

Vehicle insurance, also known as auto insurance or car insurance, is a contractual agreement between an individual (the policyholder) and an insurance company. It is designed to provide financial protection in the event of accidents, theft, damage, or other unforeseen incidents involving a motor vehicle.

In exchange for regular premium payments, the insurance company agrees to cover the costs associated with repairing or replacing the insured vehicle and potentially covering medical expenses or liabilities resulting from accidents. The specific coverage and terms of a vehicle insurance policy can vary, but it generally helps protect individuals from unexpected financial burdens related to their vehicles.

Types of Vehicle Insurance

Here are the most common types of vehicle insurance:

  • Comprehensive Insurance

Comprehensive insurance is the most extensive coverage you can have. It not only includes protection for third-party loss and damage but also covers you, your vehicle, and others involved in an accident. This policy covers everything in a third-party fire and theft policy, and additionally, it safeguards you as a driver. It may provide compensation for medical treatment, legal expenses, accidental damage, repairs after an accident, accidental damage, and even vandalism. However, note that driving other people’s cars under this policy usually offers no more than third-party cover. Despite its comprehensive coverage, it may not be the most expensive option.

  • Third-Party Insurance

Third-party insurance is the basic and mandatory coverage that protects you from damages and losses caused to a third party, excluding coverage for your own vehicle. Despite being the minimum legal requirement, it may not necessarily be the cheapest option. This type of insurance covers the costs of injury or damage you cause to others or their property. However, it does not provide any protection for your own car in case of damage or theft. It might be suitable for those who find comprehensive insurance less affordable. Third-party insurance covers damage to someone else’s property, injury caused to others, and injury to your passengers during an accident. It does not cover you or your car.

  • Collision Insurance

Collision insurance specifically covers accidents or damages to your vehicle resulting from a collision, typically when it’s your fault. This coverage takes care of repairing or replacing your vehicle, regardless of who is at fault. It provides protection in situations where your vehicle collides with another vehicle or object like a tree or pole.

Why You Need Vehicle Insurance?

Car insurance is essential for providing financial protection in the unfortunate event of an accident. Beyond safeguarding you, certain types of insurance also extend coverage to claims arising from injuries to other individuals. If you own a roadworthy car, it is a legal requirement to have at least a basic level of coverage, commonly known as third-party insurance, even if you don’t actively drive the vehicle. The sole exception is if you officially declare your car as off the road by obtaining a Statutory Off Road Notification (SORN).

Driving without insurance carries serious consequences, including fines and a minimum of six points on your license. In more severe cases, it may lead to disqualification from driving, and there is even the possibility of having your car confiscated. Ensuring proper car insurance is not just a legal obligation but a crucial means of securing yourself and others on the road.

How to Cancel Your Vehicle Insurance

If you wish to cancel your vehicle insurance, you can request your insurer to do so at any time. However, it’s important to note a few key considerations:

1.      Maintain Valid Insurance

Ensure you have alternative valid insurance if you intend to continue using your car. Canceling your current policy doesn’t exempt you from the legal requirement of having insurance coverage on the road.

2.      No-Claims Bonus Impact

If you cancel your policy midway through the current year, you may not be eligible for the no-claims bonus for that year.

3.      Cancellation Charges

Typically, cancellation incurs charges unless it aligns with your policy renewal. Be prepared to cover cancellation fees unless you’re at the renewal stage.

4.      Refund for Upfront Payments

If you’ve paid upfront and haven’t filed any claims, you can expect a refund for the remaining months, minus the applicable cancellation fees. This ensures you receive a fair reimbursement for the unused portion of your insurance.

How to Choose the Right Vehicle Insurance

Selecting the right vehicle insurance involves considering various factors and posing essential questions:

  1. Vehicle Type: Determine the type of vehicle you need to insure.
  2. Usage Patterns: Assess how you use your vehicle on a daily basis.
  3. Age Factor: If you’re a young driver, take that into account.
  4. Family Considerations: Consider whether you drive as part of a family.
  5. Travel Distance: Evaluate the distances you typically cover.

Add-ons You Can Include to Your Insurance Policy

Enhance your car insurance by adding these optional features for an extra cost:

  1. Breakdown Cover: Avoid being stranded if your car breaks down.
  2. Personal Accident Cover: Get compensation for serious injuries or fatalities in a car accident.
  3. Motor Legal Protection: Cover expenses for legal actions after an accident.
  4. Courtesy Car Cover: Receive a temporary car after an accident until yours is repaired.
  5. No Claims Discount Protection: Safeguard your discount and save on insurance costs.
  6. Windscreen Cover: Check if your comprehensive policy includes this, as replacing a windscreen can be pricey.
  7. Lost Keys Cover: Protect yourself from the expenses of replacing lost or stolen electronic car keys.


Understanding vehicle insurance is essential for every driver. Whether you opt for comprehensive coverage, third-party insurance, or collision insurance, the goal is to protect yourself, your vehicle, and others on the road. Not only is car insurance a legal requirement, but it also acts as a financial safety net in case of accidents or unforeseen events. Remember, driving without insurance can lead to serious consequences, including fines, points on your license, and even disqualification from driving. It’s not just a legal obligation; it’s a crucial step in ensuring responsible and secure driving. Drive responsibly, stay insured, and enjoy the peace of mind that comes with knowing you’re covered on the road.

Frequently Asked Questions (FAQs) 

Car insurance costs are influenced by factors such as your driving history, age, type of coverage, vehicle make and model, and even your credit score.

In most places, having car insurance is a legal requirement. It provides financial protection for both you and others in the event of an accident.

The deductible is the amount you pay out of pocket before your insurance kicks in. Choosing a higher deductible often lowers your premium but means you’ll pay more in the event of a claim.

Yes, you can switch providers before your policy expires. However, it’s essential to consider any potential penalties or fees and ensure continuous coverage during the transition.

Collision coverage pays for damage to your car in an accident, while comprehensive coverage protects against non-collision events like theft, vandalism, or natural disasters. Both are optional but provide additional protection.

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How Much is Car Insurance in Nigeria 2024?



How Much is Car Insurance in Nigeria 2024?

Curious about car insurance in Nigeria for 2024? It’s a crucial protection for drivers, ensuring both the vehicle and road users are covered. In many countries, Nigeria included, having car insurance is a must to hit the road: “How much is car insurance in Nigeria 2024?.”

As we step into 2024, you might be wondering about the cost and the best policy. Good news – we’ve got the info you need! This article covers everything about car insurance in Nigeria, from costs to types and coverage plans. We’ll also guide you on choosing the right insurance for your car and how to switch plans if needed.

What is Car Insurance?

Car insurance is a financial protection plan for drivers, covering the costs associated with damage to the vehicle or injuries caused to others in case of accidents. It’s a mandatory requirement in many countries, serving to safeguard both the driver and other road users. If unexpected bumps or accidents happen, having car insurance can help cover the costs of repairs and medical expenses.

In simpler terms, car insurance is an agreement between you and the insurance company, to cover the costs if your car gets damaged or if you’re involved in an accident. Typically, you pay a premium, and in return, the insurance company helps cover the repair costs, medical expenses, or even replacement in case of a total loss. It’s like having a backup plan for unexpected mishaps on the road, giving you peace of mind while you drive.

Types of Car Insurance in Nigeria

There are different types of car insurance, and each, has it’s own level of coverage and cost. They include:

Third-Party Car Insurance

Third-Party Insurance also known as Basic insurance typically refers to the essential coverage required by law. In Nigeria, this is the fundamental protection every vehicle owner must have. It ensures that if your car causes damage to other people’s property or injuries to individuals, the financial responsibility is covered by the insurance. While it doesn’t extend to your own vehicle, Basic Insurance serves as a legal and financial safeguard, preventing you from facing the full brunt of liabilities in case of an accident. It’s the starting point for responsible driving, ensuring compliance with legal requirements on the roads.

Comprehensive Car Insurance

Comprehensive Insurance is like a full protective armor for your vehicle in Nigeria. Unlike basic coverage, it not only handles third-party liabilities but also protects your own car. It covers the cost for a variety of scenarios, including theft, fire, and even non-collision incidents. Essentially, it’s your go-to plan for a wide range of unexpected events that can befall your vehicle. While comprehensive insurance is not mandatory, it provides peace of mind by ensuring that your car is financially shielded against a broader spectrum of risks. Whether it’s a broken windshield or a stolen vehicle, Comprehensive Insurance has your back, making it a wise choice for those wanting extensive coverage.

Collision Insurance

Collision Insurance specifically covers the repair or replacement costs of your car if it’s damaged in a collision, regardless of who is at fault. Picture it as a safety net for those unfortunate moments when your car meets an unexpected obstacle. While it may not be mandatory like third-party coverage, having Collision Insurance ensures that your vehicle is financially looked after in the aftermath of a collision, helping you get back on the road without bearing the full financial brunt of repairs.

 Personal Injury Protection (PIP)

Personal Injury Protection, or PIP, is your vehicle’s medical guardian. This type of insurance goes beyond the car itself, covering medical expenses for you and your passengers, regardless of who caused the accident. It acts as a safety net, ensuring that medical bills don’t become an additional burden in the aftermath of a collision. PIP is particularly valuable in a country like Nigeria, providing financial support for necessary medical treatments, rehabilitation, and even lost wages. While not mandatory in all regions, opting for PIP is a wise decision to prioritize the well-being of both you and your passengers on the road.

Cost of Car Insurance in Nigeria

The cost of car insurance in Nigeria can vary widely based on several factors. These factors include the type of coverage, the make and model of the car, the driver’s age and driving history, as well as the insurance company’s policies.

Starting from January 1, 2023, the Nigerian government has raised the premium rates for compulsory third-party vehicle insurance significantly. Private vehicle owners will now pay N15,000, a 200% increase from the previous N5,000.

As of now, these are the stipulated premiums on all vehicles and automobiles:

  • Private cars – N15,000 premium for a 3 million Naira claim.
  • Owned goods vehicles – N20,000 premium for a 5 million Naira Claim.
  • Staff Buses – N20,000 premium for a 3 million Naira Claim.
  • Tricycles (Keke) – N5,000 premium for 1 million Naira claim.
  • Special types – N20,000 premium for a 3 million Naira claim.

NOTE: “Special types” are vehicles such as cranes or forklift trucks that aren’t easily spotted on the road but are used for unique commercial purposes.

How to Choose the Right Car Insurance

Choosing the right vehicle insurance is important, and you can do it by thinking about a few key things:

  1. Type of Vehicle: Figure out what kind of vehicle you want to insure.
  2. How You Use Your Vehicle: Think about how you use your vehicle every day.
  3. Your Age: If you’re a young driver, keep that in mind.
  4. Family Situation: Consider if you’re part of a family that shares the vehicle.
  5. How Far You Travel: Look at the distances you usually travel.


Choosing the right car insurance is not just a legal requirement but a strategic decision to ensure financial protection in the event of unforeseen circumstances. As we step into 2024, drivers in Nigeria are encouraged to carefully evaluate their options, considering the specific needs of their vehicles and lifestyles. The recent adjustments in premium rates set by the Nigerian government shows the importance of staying informed about the latest developments in car insurance costs. Remember, the cost of insurance is an investment made to safeguard you against the unexpected.

Frequently Asked Questions (FAQs)

If your car isn’t worth much, opting for third-party motor insurance can save you money. It’s the minimum coverage required by law.

Third-party insurance in Nigeria covers your liability for injury, death, or damage to a third party’s property in an accident. It’s a mandatory insurance policy.

Third-Party Property Damage cover shields you from costs if your car damages someone else’s property. However, it doesn’t cover any damage your own vehicle might suffer in accidents or other insured events.

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