Beginner’s guide to car insurance in Nigeria

Car insurance in Nigeria – A number of car users in Nigeria may not have attached importance to getting a suitable insurance in place, regrettably many have lose a lot to this single act of carelessness.

Illustration 1

So two friends Bernard and Michael were gainfully employed with certain blue chip company in Lagos.

They were obviously living the life of their prime as young graduates who were lucky to secure regular employment in a worthy firm.

As a matter of necessity, they both took car loan to get themselves cars.

As-often than not, they visited a popular joint in Lagos mainland after work hours on a Friday evening, get their cars parked closely within eye distance, then alerted for their usual drinks and all that.

A Friday evening like no other, at least not the stress of reporting early to work on Saturday morning since that should be a weekend work free day.

Just a long the busy road, an oncoming truck veered off its main track, aimed at the both cars from the very spot they got parked, the driver rather zoomed off.

While this happens, Bernard took car loan from a company that has car insurance as part of its contract deal while Michael bought his car without such provision, which suggests he will have to source his car insurance himself. He hasn’t been able to do that before the accident.

While Bernard got his car replaced by the insurance company, Michael was left to cater for his repairs since he did not have a car insurance in place.

Read also: Car loan in Nigeria: List of best car loan providers and how to get one for yourself

From the aforesaid illustration, it’s not too difficult to see the benefit of having a car insurance in Nigeria.

What is car insurance in Nigeria?

For the benefit of newbies, insurance is a practice in which a person called the insured gets into a contract with another party/company called the insurer on a premise that the insured gets compensation for unseen risks, damage incurred on the insured/property as the case may be.

The insured is however expected to pay monthly premium, from which policy he’ll be indemnified in the event of lose.

Car insurance

Illustration 2

Assuming Mr. Bernard bought an insurance policy with ABC insurance company to insure his car.

It then follows that on event of accident or possible damage to the car by accident, fire or theft, the insurance company has a responsibility to indemnify Mr. Bernard duly to ensure he gets back to status.

He may not stand to have any contribution in fixing or replacing the car, his insurance company will have to take such burden.

To make this contract effective, Mr. Bernard gets to pay certain amount known as insurance premium to the insurance company every month.

The indemnity is however subject to risk evaluation which involves possible cause of lose, damage or theft.

As a policyholder in Nigeria, you stand to have your car changed, replaced, third party’s car repaired, replaced which in a normal sense would have cost you a lot.

Bearing in mind that you may not afford the actual cost of servicing any of the aforementioned damages at the time such accident occurs.

Before we dig further, let’s take an optical appreciation of types of car insurance in Nigeria.

Types of car insurance in Nigeria

#1. Comprehensive car insurance

From a larger perspective, it has been observed that comprehensive insurance is about the best type of car insurance one could go for in Nigeria, given to benefit it affords the insured policyholder.

However, policy cover is subject to evaluation and certain risks factors.

In this case, comprehensive insurance covers damages to an insured car resulting from collision and other damages like fire, theft etc.

To this end, the premium contribution expected from the insured is usually higher than obtainable in other types of insurance.

#2. Motor third party insurance

If you reside in Nigeria and a car owner, you should be conversant with this type of insurance.

By law, it’s compulsory for every car owner in Nigeria to have this policy in place.

By default, this policy caters to damages done to a third party by an insured or a policyholder.

Illustraion 3.

Assuming Mr. Bernard who is a motor third party insurance policyholder with ABC insurance company was driving and eventually hits DR. Ken’s car and causes damages.

Note: DR. Ken here is a third party who does not have any business or deal with ABC insurance company.

It then means that ABC insurance company will take the responsibility for fixing and reinstating DR. Ken’s car, since Mr. Bernard is a policy holder with her.

This type of insurance is however limited to car crash or collision as the case appears.

#3. The third party fire and theft cover

This may be referred to a two way insurance policy which caters for both the insured and the third party in event of loses and possible damages.

It likewise covers for damages like fire incident and car theft to the insured.

#4. Only third party cover

Like it sounds, this is an insurance policy that benefits the third party alone.

The insured does not benefit from it in event of damage, lose, fire or theft.

If you buy into this policy, then know it from the onset you’ll be buying to service a third party damage caused by you.

Frequently asked questions on “Car insurance in Nigeria”

Q. Cost of car insurance in Nigeria

Depending on the company annual insurance premium costs somewhere between N62,000 – 162,500. (Monthly contribution between N5,100 – N13,500)

Q2. What are the best comprehensive car insurance providers in Nigeria?

You may get this type of insurance with any of the below policy providers;

• Allianz Nigeria
• AIICO Insurance
• AXA Mansard etc

How to check car insurance in Nigeria

If you are just starting with car insurance in Nigeria, there’s a great chance you’ll be issued a fake and non-existing insurance, a number of users are victims of this fraud already.

To this end, you’ll need to be vigilant when acquiring a policy.

In this guide, I will show you how to check and confirm the authenticity of your insurance in Nigeria in simple steps;

For the record, “The Nigerian Insurance Database NIDB” is a database where all genuine vehicles insured by these policy providers are recorded and housed.

Read also: Car rental in Lagos: List of cheap car rental service providers in [Lagos, Port Harcourt etc]

You may check your car insurance online in the following arrangement;

• Follow this link
• In the next page displayed, select “Vehicle policy you intend to check”
• You have an option to effect the check with “Plate number or car registration number” in the column provided, then click “Search.”
• You are expected to see your vehicle status displayed here which include: The vehicle brand, color, model, expiration date of the document and the issuer’s name.

That’s just it.

Conclusion

Don’t just take it for it, a duty of diligence is on your path to ensure you actually got delivered what you ordered for having paid for a car insurance in Nigeria.

The benefits cannot be overstretched in any way, the earlier the better.

Image credit: Get Insurance