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Car insurance

Beginner’s guide to car insurance policy in Nigeria

Posted on July 6, 2021July 6, 2021 by admin

Car insurance policy should be a must get for every car owner, as a regular road user you cannot guarantee what could happen the next minute.

This is otherwise known as auto insurance, the idea is that you could run into trouble resulting to personal car destruction, third party car destruction, death, various degrees of injuries could occur.

In situations like this, a car insurance in place will relief financial burdens off you, it will be a sole liability of the insurance company to cater since you have a policy in place.

Illustration

Assuming Mr. Benjamin Ike bought a new Toyota Corolla 2020 model with a third party insurance in place, on his way to a function he accidentally ran into a Lexus RX350 Jeep and got the Jeep badly damaged.

In today’s Nigeria nobody wants to take financial loss or responsibility for another man’s damage as a result of carelessness or accident.

Since Mr. Benjamin has a third party car insurance policy in place all he’d got to do is simply inform the insurance company of the accident.

The company will carry out possible valuation of the accident and get the third party’s car fixed appropriately.

Note: This will stand because Mr. Benjamin has a third party insurance policy with the company and he has been faithful with his premium.

This now brings us into defining the concept of car insurance in Nigeria.

What is auto insurance?

Auto insurance is a contract between you and the insurance company which protects you against possible unforeseen financial loss in event of accident or theft, as a benefit for paying your premium the insurance company will pay or see to your loss as agreed initially in your policy

Types of car insurance

However, auto insurance comes in different specification according to a need you wish to fill.

The most common auto insurance policy in Nigeria are

  • Third party auto insurance
  • Comprehensive auto insurance

Third party auto insurance

The third party auto insurance is mostly practiced in Nigeria and by every standard a compulsory insurance to buy provided you have a car.

Third party auto insurance covers

  • Death
  • Accidental body injury and
  •  Damage to property of a third party

You buy this insurance policy solely to protect a third party and not yourself. If you by any means cause damage, injury that results to death, or damage on a third party property this insurance will indemnify the third party on your behalf since you have been faithful to your premium.

Read also: Beginner’s guide to life insurance in Nigeria

Comprehensive auto insurance

In Nigeria, this is not a compulsory insurance policy to buy, however could save you a lot of stress in event of an unforeseen danger.

This policy issues a comprehensive vehicle insurance which covers all risks related to owning and driving your car.

These risks include,

  • Loss or damage done to insured vehicles emanating from may be fire, theft or vandalism of any kind. Not ruling out accidental damage, etc.
  • Legal liability for death
  • Damage to property of a third party and bodily injury which usually is incurred as a result of using an insured vehicle.

Cost of third party insurance in Nigeria

If you wish to buy a third party insurance, it could attract annual premium around N5,000 and N10,000 this is strictly dependent on the type of vehicle you are looking to insure.

As a Nigerian car owner this is the type of insurance the Nigerian government requires of you and it’s a compulsory package.

How to check car insurance in Nigeria

It will be of great help if you can check the authenticity of a car insurance policy you just purchased, this will save you a lot of stress since nothing is guaranteed in Nigeria.

You may run the risk of being given a fake insurance having paid for the real/original auto policy.

Here’s how to check if your auto insurance is genuine.

Kindly visit www.askniid.org and follow the instruction thereafter.

There’s a space to enter your vehicle number or insurance policy.

If your car insurance policy is genuine, your vehicle number, policy number and vehicle type will appear.

On the contrary, you will only receive a blank information which suggests that your vehicle policy is fake to the core.

Comprehensive insurance price in Nigeria

Insurance companies in Nigeria will usually charge between 4-5% of the value of the proposed insured car for one year

Some cars may come with a comprehensive insurance as a bonus to the buyer, if this is something you will really need off you for the first year, you may have to consider buying a car from a company that has a comprehensive insurance as an added advantage to a buyer.

Car insurance companies in Nigeria

  • AIICO insurance
  • Cornerstone insurance
  • AXA Mansard insurance
  • Leadway Assurance
  • FBN general insurance
  • Consolidated hallmark insurance, etc. These are some of the insurance companies you could buy from in Nigeria.

Conclusion

Auto insurance in Nigeria is a necessity for every car owner especially the third party insurance, the government made it compulsory so long you have a car.

It only caters for injuries or damages caused a third party in the course of using such car.

It won’t been a bad idea to buy a comprehensive insurance too, it’s expensive but has a wide range of coverage that could save you unnecessary expenses in case of an unforeseen risk which you cannot rule out provided you have a car that operates on the Nigerian road.

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