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Motor Insurance in Nigeria started before the coming of Britain into the country. The modern insurance was introduced to Nigerians by European Trading Companies, which establish merchants as agents for insurance business.

The first insurance company in Nigeria is Royal Exchange Assurance Company, which has its headquarters in Lagos by 1921. The introduction of this company marked the beginning of modern insurance in Nigeria whole motor insurance in the sense is a method of transferring the responsibility for paying for losses, injuries or damage to person or properties from one party to another as a result of using motor vehicle on the road. The demand for motor insurance has been greatly increased because of its standardized motor insurance tariff rate table.




motor insurance in Nigeria started before the coming of Britain into the country traditional method of insurance was practical in the country then, before civilization and modern insurance we had what is called our own insurance system named periodical contribution Ajo Esusu and Adishe membership in the former are know while contributing predetermined at inception.

Benefit of the accumulated fund are taken depending on the order return in the letter, however, membership is limited to the house hold while there is no regulation of the premium but a kind of levy or donation by each able membership the intention of all these forms of insurance is the same as the modern insurance

Every member would rally round for any member that suffers a loss. Modern insurance was introduced to Nigeria by European trading companies, which established merchants as agents for insurance business. As at that time, Nigeria trade and merchants of substantial status were given power to secure insurance business, issue cover for cargo and also given helping issue in claims settlements. This is the way the European Trading Companies had their interest represented in Nigeria.

The first insurance company in Nigeria is Royal Exchange Assurance company which has its headquarter in Lagos by 1921. the introduction of this company marked the beginning of modern insurance in Nigeria.

Growth in the motor insurance business in the earlier year was very slow due to the limited number of vehicles registered. From 19851 up ward there was tremndous growth of motor insurance representing about 40% market share in 1978 due to large scale importations of motor vehicles generous cars loans and allowances to workers during the year of oil boom era.

Gradual increase in the number of motor vehicles consequently, the numbers of accidents on the highway increase to minimize the provide compensation to government introduces, compulsory insurance on motor by the provision of section three motor insurance third party ordinance of 1945 which stated that “it shall not be lawful for a permit to any other person to use a motor vehicles on road unless there is force in relation to the use of the vehicles by that other person, policy of insurance issued by an authorized insurer covering the person in respect of third party liability

Motor insurance is the real since is a method of transferring the responsibility for paying for losses, injuries or damages to person or properties from one party to another as a result of using motor vehicles on the road.

Motor insurance operation as in other classes of insurance starts from the proposed insured who offer a business contract to the insurance on the hand calculated from question with appropriate answer.

The insurer on the hand calculated the premium into a common poor administered and controlled by the insurer.

In return to the payment of the premium, the insurer agrees to assume the insured risk and undertakes to indemnify the insured for looses arising from the specified perils insured against. The terms of the insurance agreement are embodied in a document called insurer. This policy is signed by the insures and from the basic of evidence of the existence contract of insurance between the insured and the insurer.

During the currency of the insurance contract which is usually a year under motor insurance if the insured should suffer a loss against the especially in writing to the insured by sending them notification letter. The insurer, however, investigates the claim and if everything is in order, it pays the sum it had agreed to pay.

The demand for motor insurance has been greatly increased because of its standardized motor insurance tariff rate table, likewise as a result of it compulsory nature.

The tariff which is has been regulated by the government was tabled out by the tariff agreement comprising of insurance underwriter who pools their statistics together and set minimum rates for the various classes of motors insurance

The staff agreement did not any deal with the adoption of standard and adoption of standard and policy wording and condition such as discount for any, voluntary excess, on claims discount and maximum rates of commission payable to agents and brokers.


(1) Dishonesty on policy of the parties in the motor insurance practices in Nigeria

(2) Poor claim settlement by the insurer

(3) Some of the insurance companies create problems in insurance industry


The objective of this study is to satisfy that,

(1)        To find out how claims are being settled whether they are settled promptly in time whenever it is reported to in insurers

(2)        To find out a way to improve motor insurance practice in Nigeria

(3)        To also find out a way to Avoid and reduce risk of motor accident in Nigeria

(4)        To find effect or in part motor insurance has on the economy of Nigeria.


The important of this study can not be over emphasized.

The research if of the opinion that, will expose more effective way of practicing insurance business in Nigeria to be benefit the insured and insured and insurers respectively.

Also, this study will correct and erroneous impression of the public that insurer are legalized robbers. The insured will be educated on practice of motor insurance business in Nigerian which include cases of unsettled claims.


A large number of the insuring public are of the perception that motor insurance practice gives insurance industry bad name

Federal Government Legislation on compulsory motor insurance serves as the main reason for motorist taking up motor cover. The publics do not appreciate the benefit on insurance services.

Illiteracy of the insuring public has a negative effect on the practice of motor insurance n Nigeria.


The scope of this study will be limited to Nigeria and focus mainly on National insurance Cooperation of Nigeria (NICON) it is hoped that the result of this world provided valuable frame for a possible of motor insurance on the entire insurance practice in the country.

Moreso, the geographical extension of cover provided to insured covering them against thirds party: liability in the Economic community of west African Countries ECOWAS will brief examine. The following problem will not enables the researchers to carry out the research work properly.

Firstly, time constant, there are limited period of the research to be look into, prepare and submit upon load of other academic work to be complete such as feasibility study report continuous assessment and test.

Secondly, financial due to the fluctuation in transport were presently in the nation substantial amount of money is to be spent by to another and movement with one city to collect dates from insurance companies, and insurance institute of Nigeria magazine and journals.

Thirdly attention from the public the journals public especially the insuring public are not always within to give the researcher proper attention to interview.

Lastly, the insurance executive are always out of the town on officials assignment trip and not available for interview.


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