Understanding Third Party vs Comprehensive Car Insurance in Nigeria

Buying car insurance in Nigeria can be confusing with all the different options available.

The two main types of car insurance in Nigeria include Third Party and Comprehensive. Understanding the key differences between these policies is important so you can decide which best suits your needs and budget.


This article will explain Third Party and Comprehensive car insurance in simple terms to help make an informed decision.


Third Party car insurance, sometimes called Third Party Liability insurance, is the basic minimum legal requirement for all vehicles in Nigeria. It covers injury or death claims for third parties – meaning people other than the policyholder – in an accident you cause.

Third party insurance does NOT cover any damage to your own vehicle. It only pays out to other parties involved directly in an accident that is your fault. Some key things covered under Third Party insurance include:

  • Bodily injury or death of third parties
  • Property damage costs caused to third parties like damage to vehicles or buildings
  • Legal/court costs if third parties sue you after an accident you caused

Third Party insurance solely focuses on covering financial liability and legal costs for injuries/damage when you are at-fault in an accident. It protects third parties, not your own vehicle. This policy satisfies the basic legal requirements for car insurance but has limited scope.


Comprehensive insurance is an upgraded, extensive policy that combines Third party liability coverage plus added protections for your own vehicle. A Comprehensive policy covers:

  • Everything included in Third Party like bodily injury, death and property damage of third parties.
  • Damage to your own vehicle from events like accidents, theft, fire, floods and more.
  • Additional protections often available for extra premiums e.g. personal accident benefits.

The key advantage of Comprehensive insurance is that it protects both third parties and your own vehicle and medical expenses. So it safeguards other parties on the road from your mistakes, as well as protecting your asset – your car! This gives complete peace of mind but comes at a higher price.


Here are some major differences between Third Party and Comprehensive car insurance in Nigeria:


  • Third Party only covers injury and damage costs for third parties, not your vehicle
  • Comprehensive covers third parties plus damage to your own car


  • Third Party – Mostly accident cover only.
  • Comprehensive – Accident, theft, fire, flood, vandalism cover.


  • Third Party does NOT pay for any repairs or damage costs to your vehicle.
  • Comprehensive pays for repairs up to the insured value of your vehicle.


  • Third Party has a low premium as coverage is limited.
  • Comprehensive costs significantly more as coverage is very wide.


  • Both policies cover your legal costs related to accidents.
  • But maximum payouts often differ, stated in policy document.


The choice between Third Party vs Comprehensive insurance depends on your budget, car value and personal risk appetite. Consider these factors to decide:

If you drive an old lower value car, Third Party may be sufficient since repairs may outweigh a total loss claim. The focus is only insuring injury/damage risks to others.

For new cars or vehicles with financing, Comprehensive is strongly advised. It gives total loss protection plus covers your asset against theft and non-accident damage. The premium costs are justified for expensive cars.

Also assess your risk appetite. More coverage brings peace of mind. If you can’t self-insure repairs or liability claims from savings, it’s best to buy comprehensive insurance despite higher costs.


Are you in a crossroad thinking of how to choose between third party or comprehensive car insurance in Nigeria?

Here are some frequently asked questions about Third Party vs Comprehensive Car Insurance in Nigeria:

  • What is the difference between Third Party and Comprehensive car insurance?

The main difference is that Third Party insurance only covers damage or injury caused to a third party due to an accident by your vehicle. Comprehensive insurance provides wider coverage that includes third party liability as well as damage or theft of your own vehicle.

  • What does Third Party insurance cover?

Third Party insurance covers bodily injury or death of third parties involved in an accident caused by you. It also covers third party property damage costs. But it does NOT cover damage to your own vehicle under any circumstances.

  • What does Comprehensive insurance cover?

Comprehensive insurance covers everything included in Third Party, plus damage to your own vehicle from incidents like accidents, theft, vandalism, fire, floods and more. Some policies also include additional benefits like personal accident cover.

  • Is Third Party insurance mandatory in Nigeria?

Yes, the minimum Third Party insurance cover is legally mandatory for all vehicles driven in Nigeria. Comprehensive cover is optional but highly recommended for valuable cars.

  • Is Comprehensive car insurance expensive?

Comprehensive insurance costs more than a basic Third Party policy but gives you complete financial protection. The premium varies based on the insured value of your car, location, driving history etc. It is money well spent to protect your valuable asset.

  • What cars is Third Party insurance suitable for?

Basic Third Party insurance may be suitable for older, low value vehicles where comprehensive cover premium exceeds the current market value. This restricts insurance expense while meeting legal requirements.

  • Should I buy comprehensive insurance for used cars too?

Buying a Comprehensive policy is still advised for used cars. It prevents significant out-of-pocket repair expenses and total loss in events like major accidents, theft or flooding damages. Additional premium cost often justifies the risk coverage provided.

That’s it! I hope these frequently asked questions help explain the major differences between Third Party and Comprehensive car insurance policies in Nigeria! Let us know in the comments section below if you need any other questions.


Evaluating Third Party against Comprehensive insurance requires understanding what risks are covered under each policy and what’s excluded.

While Third Party meets bare minimum legal needs, Comprehensive delivers superior financial protection all round.

Ultimately the additional premium costs of Comprehensive must be weighed against the car’s value and your risk tolerance.

Consider all these factors before deciding what type of car insurance fits your situation best.

Mfonobong Daniel

I am Daniel, a professional financial blogger, an insurance agent and financial adviser. Join me as I unravel and breakdown the mysteries behind insurance policies in Nigeria.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *