Why car insurance is not popular in some parts of the world

Car insurance is a very important concept for every car owner. Taking this policy however requires that the car owner must properly understand the policy document and the clauses included in it.This insurance covers car owners and insures the risks associated with owning a vehicle. These risks include accidents, damages and loss of the vehicle through theft.

This insurance may cover only the vehicle, life of the vehicle owner or even both. Not taking car insurance in most places imply that you are breaking the law.

Car insurance is very popular in Europe and North America. It is unfortunately not the same in Africa as a whole. In the United States of America, all but two states require legally that every car owner take car insurance. These laws are strictly kept and defaulters are made to face the full extent of the law.

As at 2019, the NIA reported through The Guardian Newspaper that only about 2.53 million out of the 12 million registered vehicles on Nigerian roads, have genuine motor insurance certificates, leaving about 9.5 million effectively uninsured.

Business Day newspaper in 2022 that out of the 12 million vehicles registered in Nigeria, 8.6 million of them, or 71.7 percent do not have insurance cover as required by the law. This statistic was presented by Nigerian Insurance Industry Database (NIID) set up by the insurance industry to capture insured vehicles, and assist the law enforcement agents monitor compliance.

As the population grows, so does the amount of car owners and so does the amount of car owners without car insurance.


Why is car insurance unpopular in some parts of the world?

Although the Insurance Act 2003 mandates every vehicle that is registered in Nigeria to have third party insurance, more than half of the vehicles plying Nigerian roads do not have this insurance.

An array of reasons make car insurance unpopular and hard to come by. Some of them include:



This may sound mild but a lot of people truly do not understand the value and importance of vehicle insurance. There isn't any widespread sensitivity on the value of insurance and why it is important to acquire insurance on vehicles.

Many people also feel that car insurance does not cover much even in the case of an accident or in a situation where the vehicle requires repair. This is in fact not true. Depending on the insurance plan, most insurance companies will take on all or most of the cost of repair.

The national orientation agency could turn the tide by taking upon sensitization programs to enlighten the people about the importance of insurance.



A large part of the Nigerians for example population is poor and cannot afford insurance. Most people do not want to add another expense or bill to their already high one by taking car insurance. These people prefer to ride their luck with their vehicles and hope that nothing happens.

Data Bank provides that 39.1 percent of Nigerians lived below the international poverty line of $1.90 per person per day in 2018/2019.

It will be a far reach to expect any significant level of vehicle insurance in a nation where more than a quarter of the population steuggles to even feed.



Some Nigerian vehicles have insurance covers that are not genuine. The insurance might have been given by a fake entity to cheat the ignorant driver or the driver may opt for a fake insurance because it is cheaper and avails him an insurance certificate.

The presence of corruption makes it very difficult for the Road saferty and the vehicle inspection officers to adequately carry out their tasks.


Optimism Bias

Humans can suffer from a phenomenom called optimism bias. This bias makes humans think that something bad is less likely to happen to them than it is to others.

Humans that have optimism bias do not even consider taking car insurance because they tend to believe that they will never be in an accident.

This is in sharp contrast to North American and European countries where people are much more inclined to being law abiding rather than using personal logic or emotions to make decisions.


People feel they don't drive regularly

Another reason people do not take vehicle insurance is because they feel they do not drive regularly.

They feel like most of the drive is to work and back, to the grocery store and back and to other short distances. For them, this reduces the likelihood of accidents or break down.

Unaware of the high cost of repairs Most people do not take car insurance because they are unaware of how expensive it could be to fix a damaged vehicle.

This is why the importance of insurance should be reiterated to car owners.


Difficulty in getting information

There are so many misinformations on car insurance. Many people do not know what insurance to get, how much such insurance covers them or even how much distance they qualify for.

Most drivers are even often puzzled on what insurance company to choose and why they should choose them.

The provision of regular and accurate information could provide a surge in the car insurance industry.

Car insurance is very important notwithstanding who you are or what car you drive. The law must not even compel a person to acquire car insurance. Buying car insurance should be borne out of understanding the risks and uncertainties that surround owning any machine. You should contact an insurance agency today and get your car insured.

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