Last Updated on June 25, 2023
In Nigeria, owning a car provides convenience, freedom, and a sense of accomplishment. However, along with the joys of car ownership come responsibilities, including the need for car insurance. One property that is always subject to damage or loss is cars. That is why it is a good idea to have comprehensive car insurance in Nigeria.
Car insurance acts as a protective shield, ensuring that you are financially prepared for unexpected accidents, damages, or thefts.
In this comprehensive guide, we delve deep into the intricacies of car insurance in Nigeria, exploring the types of coverage available, factors that affect premiums, how to choose the right policy and much more. By the end, you’ll be equipped with the knowledge to make informed decisions and safeguard your vehicle with confidence.
What is Car Insurance Exactly? Why is it Important?
Car insurance (also known as vehicle insurance, motor insurance, or auto insurance) is an agreement between a car owner and an insurance company. If something ever goes wrong with your car, the insurance company will have your back in the form of financial compensation. In exchange, the car owner pays an amount, usually a monthly fee known as a car insurance premium to the insurance company.
The insurance company provides coverage for various risks, such as accidents, thefts, fire, vandalism, third-party liability and other situations that could also arise from incidents in a vehicle.
Car insurance is not just a legal requirement in Nigeria; it is a crucial tool for protecting your investment and ensuring financial stability.
Types of Car Insurance in Nigeria?
There are two types of car insurance in Nigeria that you can purchase; they are:
- Third Party Motor Insurance
- Comprehensive Car Insurance
Third-Party Motor Insurance
As a legal requirement in Nigeria, third-party liability insurance covers damages or injuries caused to third parties in an accident. It can safeguard you from potential legal and financial repercussions when you get into a car accident with a third-party car.
Third-Party Motor Insurance is a compulsory insurance policy in Nigeria. it is the legal minimum level of vehicle insurance cover any vehicle owner plying Nigerian roads is required to have.
The benefits of Third Party car Insurance in Nigeria make it a no-brainer for every Nigerian to possess. Third-Party Motor Insurance policy takes care of the damage caused by the insured (policyholder) to third parties body and third-party vehicle and property.
The limit for third-party car or property damage is usually N1 million. However, This limit can be increased by paying an additional premium. While there is no limit put on bodily injuries and death to third parties.
Third-party motor insurance is very important as far as third-party road users are concerned as well as for the insured (policyholder) as it protects car owners from losses caused by their cars on other people.
Also Read: List of Best HMO in Nigeria
Comprehensive Car Insurance
Comprehensive car insurance provides a wider scope of coverage, protecting your vehicle against theft, vandalism, natural disasters, and accidents. It also offers additional benefits such as roadside assistance and coverage for personal belongings.
For an extra fee, your comprehensive Auto insurance policy can include additional features such as:
- Provisional car to use for some time in cases of theft or severe damage to the vehicle.
- Excess buyback
- Increase in TPPD (Third Party Property Damage Liability)
- Medical bills
- Cover for loss of personal items
- No claims bonuses, that allow the policyholder to get a return on premiums paid after a certain number of years
- Protection against natural events (storms, floods, tempests)
- Protection against strikes, riots and civil commotion
- Vehicle trackers. Usually provided free for cars worth ₦3 million and above.
Therefore comprehensive auto insurance can be viewed as third-party insurance plus personal auto insurance. Even though comprehensive auto insurance isn’t compulsory under Nigerian law, it comes highly recommended for all vehicle owners.
Third-party Car Insurance vs Comprehensive Car insurance
While third-party car insurance is required under Nigerian law and comprehensive auto insurance isn’t. Comprehensive auto insurance is the better preferable option when choosing a car insurance policy in Nigeria because it has all the features of third-party motor insurance and much more.
However, if you’re seeking the least tenable option, then third-party motor insurance is fine as well.
Where to Get Motor Insurance in Nigeria?
You can get car insurance in Nigeria or motor cover as an option when you’re buying a car from most authorised car dealers in Nigeria. It is important to note that car or auto dealers aren’t insurance companies. Rather, they have a relationship with the insurance companies.
So it is essential to ensure that the insurance company the car dealer is working with is registered and has a good reputation in the auto insurance industry.
You can find out if an insurance company is registered by checking Naicom’s website. Naicom is the regulator for everything insurance in Nigeria.
Best Comprehensive Car Insurance Companies in Nigeria?
Finding a good car insurance company in Nigeria can be a bit tricky.
So here’s a list of the best comprehensive car insurance companies in Nigeria with a good reputation:
How Much is Comprehensive Car Insurance in Nigeria
A comprehensive car insurance policy in Nigeria is anywhere between 5% – 10% of the total value of your vehicle (car) yearly.
- AIICO Insurance Plc
- AxaMansard Insurance
- Cornerstone Insurance
- IGI Nigeria
- Mutual Benefits Assurance
- Old Mutual Insurance
Factors Affecting Car Insurance in Nigeria Premiums
A car insurance premium is the specific amount of money you pay an insurance company to provide insurance protection for yourself and your vehicle.
Here are the factors that affect car insurance in Nigeria premiums:
1. Vehicle Value and Age
The value and age of your vehicle play a significant role in determining your car insurance premiums.
2. Driver’s Age and Experience
Your age and driving experience influence the level of risk associated with insuring your vehicle. We explore how these factors impact your premiums and provide tips for young and inexperienced drivers to mitigate their insurance costs.
3. Claims History
A history of previous claims can affect your car insurance premiums as well. We explain how your claims history is assessed by insurance providers and offer guidance on maintaining a positive claims record to secure more favourable premiums.
4. Vehicle Security Measures
Installing security devices in your vehicle can have a positive impact on your insurance premiums. Enhancing your vehicle’s security can lower your premiums.
Navigating Car Insurance Policies
Policy Terms and Conditions
You need to ensure that you are well informed and know what to expect from your coverage.
Renewal and Cancellation Policies
Renewing your car insurance policy on time is essential to maintain continuous coverage. it helps to navigate these procedures smoothly and avoid any lapses in coverage.
Making a Claim
In the unfortunate event of an accident or theft, knowing how to make a claim is crucial, so you can have a seamless and efficient claim experience.
Tips for Choosing the Right Car Insurance
To choose the right car insurance, it’s important to assess your coverage needs. Also comparing insurance providers is key to finding the best coverage and premiums. Car insurance providers often offer discounts and benefits that can help you save on premiums.
What are the Two Types of Vehicle Insurance in Nigeria
The two types of vehicle insurance in Nigeria are Third-party Auto Insurance and Comprehensive auto insurance.
How Do I Insure a car in Nigeria
You can insure a car in Nigeria by getting in touch with insurance companies like AIICO Insurance Plc, AxaMansard Insurance, Cornerstone Insurance,IGI Nigeria, Mutual Benefits Assurance, and Old Mutual Insurance.
Is Car Insurance Mandatory in Nigeria
Yes car insurance is mandatory in Nigeria as the Federal Roads Safety Corps (FRSC) Act insist on any vehicle plying Nigerian roads must have at least third-party motor insurance coverage or comprehensive insurance coverage.