Do you know that it is illegal to not possess a car insurance policy in Nigeria and also a criminal offence in most of the countries around the world?
Car Insurance is an agreement between a car owner and the Insurance company, where the company will cover the financial losses resulting from damages such as accident, fire, theft, vandalism, etc sustained by the insured car in exchange of the car owner paying a regular fee to the Insurance company.
The car Insurance company pays and helps to mitigate the financial aspect for every loss when your car gets vandalized, stolen, destroyed, crashed, etc.
Car Insurance can sometimes cover legal claims arising from the accident.
When you want to buy your insurance policy, you would need the following:
This contains the basic information about the car owner and the car such as name, address, phone number, car details, etc.
This includes a physical and pictorial inspection of the car.
This involves the verification of the bank details of the car owner, this is to verify the financial identity, risks, etc.
There are two types of Car Insurance in Nigeria:
This type of insurance only provides coverage for the damage caused to the third party’s property by the Insurer-Car Owner. This kind of insurance won't cover the damages done to your car but the damages done to the third party’s car or property. For instance, if you crash into someone else’s car or damage someone else’s property, the insurance will only pay for the damage you have caused to the other person and you would have to fix your car with your money.
Under the Motor Vehicle Act 1950, it is stated that Third Party Insurance is the minimum level of insurance every car owner should have.
This type of insurance is less expensive compared to Comprehensive Car Insurance. However, the insurance might not cover the damages if it is caused either by driving drunk or driving without a valid car license.
In Nigeria, this kind of insurance costs about five thousand naira (#5,000) to ten thousand naira (#10,000) per annum
This type of insurance policy provides coverage to both the damage or loss of the Insurer’s car and to the third party’s car, that is, it is protecting both your car and the car or property of the third party. And this is one of the reasons why it is more expensive than Third-Party Insurance but it is said to be highly effective.
To get this type of insurance in Nigeria, a car owner is charged between 4% to 7% of the car's value per annum and it can come with addons like a car tracker
However, this type of insurance doesn’t cover damages caused to your car by the aging, wearing and tearing of your car, in general, the depreciation of the car. It also doesn't cover damages caused by war or riots.
Driving under the influence of drugs or alcohol
Driving without a valid car license
Negligence caused by the car owner.
Car Insurance works in Nigeria and it is very important to get a Car Insurance policy to avoid unplanned financial expenses.