A significant new law now governs car insurance in Nigeria, and the vast majority of drivers have not read a single line of it. The NIIRA Act 2025 introduces new car insurance rules in Nigeria, including stricter insurer deadlines, stronger consumer protections, and compensation mechanisms for accident victims.
These protections exist whether or not your insurer mentions them. Read on to find out exactly what changed, what it means for your auto policy, and what to check before your next renewal in 2026.
What is the Nigerian Insurance Industry Reform Act 2025, and why should you care?Â
The Nigerian Insurance Industry Reform Act 2025 (NIIRA 2025) is the biggest update to Nigeria’s insurance industry in more than a decade, and it directly affects how car insurance is sold, renewed, and claimed in 2026. The law replaces major parts of the old Insurance Act 2003 and introduces stronger protections for policyholders.
These are the 3 changes that matter most to you as a car insurance policyholder:
- Insurers are expected to settle admitted claims within 60 days of notification.
- Any insurer that delays payment beyond that period may face a ₦500,000 penalty and must pay monthly compound interest on the outstanding claim amount at the prevailing bank rate.
- The Act establishes a Road Accidents Victims Compensation Fund and additional policyholder protection mechanisms designed to compensate or protect victims where insurers fail, or where accidents involve uninsured or unidentified drivers.
These protections form part of the consumer protection framework introduced under the Act.
MyCoverGenius, in partnership with AIICO, Sovereign Trust Insurance Plc, and Coronation, operates in compliance with the NIIRA 2025 car insurance requirements, meaning policies issued through the platform are aligned with these consumer protection standards.Â
How the NIIRA 2025 protects you as a policyholder
The Nigerian Insurance Industry Reform Act 2025 gives you three enforceable insurance claim rights for stronger legal protection as a car insurance policyholder in Nigeria. These are not optional promises from insurers. They are rights backed by law and enforced by NAICOM (National Insurance Commission).
Here is what that means for you:
You now have a legal right to faster claim settlement
Once you submit a valid and fully documented claim, your insurer is expected to settle it within 60 calendar days under the NIIRA 2025 framework. If they miss that deadline, monthly compound interest begins accruing on the unpaid amount.
But there is an important detail many drivers miss: the 60-day countdown only starts after your insurer receives all required claim documents. If anything is missing, your car insurance claim can be delayed legally while the insurer waits for complete documentation. That means knowing the correct claims process before an accident happens can directly affect how quickly you get paid.
You may still receive compensation even if the other driver is uninsured
Before the NIIRA 2025 reforms, getting compensation after an accident with an uninsured or hit-and-run driver could leave you carrying the financial loss yourself. The new Road Safety and Accident Victims Compensation Fund was created to help protect accident victims in situations like these. If the driver who hit you has no valid insurance policy or cannot be identified after the incident, you may be able to apply to the fund for compensation instead of absorbing the full cost alone.
The Fund is regulated under the NIIRA 2025 framework and supervised by NAICOM. Detailed claim procedures and implementation guidelines are expected through additional regulatory updates, so it is important to monitor official NAICOM announcements as they are released.
You have the right to a verifiable insurance policy
Under the NIIRA 2025 car insurance update, your car insurance policy should be traceable on the National Insurance Industry Database (NIID). If your policy cannot be verified there, it may not be recognised as valid insurance coverage. The law also increases regulatory scrutiny on insurers that issue unverifiable or non-compliant certificates, with enforcement overseen by NAICOM.
If you are unsure whether your current policy is active on the database, you can verify it yourself by searching your vehicle plate number on the NIID portal before your next renewal.
Choosing the right type of coverage matters too. If you are not sure what type of car insurance coverage fits your needs, we talked about the different plan options, costs, and benefits here in this guide.
What to check before you renew your car insurance in 2026
Before you renew your car insurance in 2026, the NIIRA 2025 car insurance requirements make it more important than ever to verify that your policy is genuine, compliant, and actually gives you the protection you are entitled to under the law.
4 Things you should check before renewing your car insurance
- Is your policy verifiable on NIID?: Your insurance policy should appear on the National Insurance Industry Database (NIID). If you cannot verify your policy there using your vehicle plate number, your coverage may not be recognised as valid under the current regulatory framework.
- Is your insurer licensed by NAICOM?: Your insurer should also be licensed and regulated by NAICOM (National Insurance Commission). Buying coverage from an unlicensed provider can leave you without the legal protections and claims enforcement standards introduced under NIIRA 2025.
- Does your car insurance plan cover your own vehicle?: Many drivers assume every policy covers damage to their own car, but that is not how all insurance plans work. Third-Party insurance mainly covers damage or injury caused to other people. If you want protection for your own vehicle after theft, vandalism, fire, or accidents, you typically need a Comprehensive or Mini Comprehensive car insurance plan.Â
- Are your documents easy to access after an accident?: Under the NIIRA 2025 claims framework, the settlement timeline only starts after your insurer receives all required documentation. That means delayed or missing paperwork can slow down your claim. Keep your insurance certificate, vehicle papers, driver’s licence, and any previous claim records stored somewhere you can access quickly when needed.
Renewal is the right moment to fix a policy that no longer works for you. Compare MyCoverGenius auto insurance plans from ₦15,000/year.
The law has changed, and your policy should reflect that
The Nigerian Insurance Industry Reform Act 2025 introduces stronger protections for drivers across Nigeria, including faster claim settlement timelines, compensation support for victims of uninsured or hit-and-run drivers, and stricter enforcement against unverifiable insurance policies.
As a driver, understanding these changes gives you more control over the kind of insurance coverage you choose and the standards your insurer is expected to meet in 2026. But these protections only work if your policy is genuine, active, and properly registered.
MyCoverGenius, in partnership with AIICO, Sovereign Trust Insurance Plc, and Coronation, issues NIID-registered, NAICOM-compliant car insurance policies that can be managed digitally from purchase to claims directly on the MyCover App.
Get covered today with MyCoverGenius
Frequently asked questions about the NIIRA 2025 car insurance update
What is the Nigerian Insurance Industry Reform Act (NIIRA) 2025?
The Nigerian Insurance Industry Reform Act (NIIRA) 2025 is the most recent update to Nigeria’s insurance regulatory framework in more than a decade, replacing major parts of the Insurance Act 2003. For car owners specifically, it introduces a mandatory 60-day claims settlement timeline, monthly compound interest on delayed payments, and a Road Safety and Accident Victims Compensation Fund for certain accident victims. The law is enforced by NAICOM (National Insurance Commission).
How much is car insurance in Nigeria?
Third-party car insurance plan through MyCoverGenius (in partnership with AIICO, Sovereign Trust Insurance Plc, and Coronation) starts from ₦15,000 per year. Comprehensive car insurance is typically calculated as a percentage of your vehicle’s value, with premiums starting from approximately 5% of the vehicle value annually, depending on your car, usage, and coverage level. See a full breakdown of plan types, pricing, and benefits here.
Where can I download the NIIRA Act 2025 PDF?
The official version of the NIIRA ACT 2025 is available through NAICOM’s official website. Avoid relying on unofficial third-party downloads, since outdated or incomplete versions of the legislation may circulate online.
What happens if my insurer does not settle my claim within 60 days?
Under the NIIRA ACT 2025 framework, monthly compound interest may begin accruing on any valid and fully documented car insurance claim that remains unpaid beyond the 60-day settlement period. To protect yourself, keep records of your submission date and ensure all required documents are provided at the point of submission, since the settlement timeline starts once your insurer receives complete documentation.
Does the NIIRA Act 2025 affect third-party insurance claims?
Yes. The 60-day settlement timeline and late-payment penalties apply to valid motor insurance claims generally, including third-party insurance claims cases. If a fully documented third-party claim remains unpaid beyond the allowed period, monthly compound interest may apply to the outstanding amount under the NIIRA ACT 2025 framework.
What is the Road Safety and Accident Victims Compensation Fund?
The Road Safety and Accident Victims Compensation Fund was introduced under the NIIRA ACT 2025 to help compensate victims of road accidents involving uninsured or unidentified drivers, including certain hit-and-run incidents. The Fund operates under the broader regulatory supervision of NAICOM, with detailed implementation procedures expected through additional regulatory guidelines.
Can I still be held liable if the other driver has no insurance?
Yes. If you caused an accident and do not have a valid insurance policy, you can still be held personally responsible for the resulting damages. The Road Safety and Accident Victims Compensation Fund is designed to help protect innocent accident victims. It does not remove liability from uninsured at-fault drivers.