12 Common Mistakes to Avoid When Buying Car Insurance in Nigeria

Owning car insurance is important for every car owner in Nigeria. It protects you from future financial needs that could arise due to your vehicle. With the right car insurance policy, you’ll basically move through years of owning a car without having to pay for any car damages.

While having car insurance is important and comes with a lot of handed benefits to the car owner. What happens when you get the wrong car insurance, or you don’t get the right insurance coverage for your vehicle? It automatically means you won’t enjoy the benefits of owning car insurance.

What leads to issues like this one where a car owner does not enjoy great car insurance benefits? Well, it’s a result of most mistakes that car owners make when they are buying their car insurance. Making mistakes while buying car insurance will cost you a lot as a car owner.

To save you from some of the commonly made mistakes most car owners make while paying for insurance premiums in Nigeria, we’ve highlighted some of these mistakes, how they can cost you, and how to avoid falling for any of them.

Wondering what these common insurance mistakes car owners make are? Keep reading below to learn all about it.

12 Top Mistakes to Avoid While Paying for Car Insurance in Nigeria

In simple terms, car insurance mistakes will cost you a lot. Sometimes it could be missing out on necessary insurance coverage. Other times, it could mean finding yourself in a legal battle with your insurance company or even getting scammed. All of these can be easily resolved by the following points listed below. 

1. Avoid Doing Basic Research

Buying car insurance requires the level of in-depth attention you give to other activities you do online. Avoid immediately making payments for the first insurance company you spot online. Research as many insurance companies in Nigeria and verify that they are legit. 

Oftentimes, researching a suitable car insurance company takes a lot of comparisons to determine which is the best fit. Quickly jumping on the first insurance company you find online is an easy way to get scammed. Always take your time to go through the information on insurance companies’ websites in Nigeria.

2. Always Compare Insurance Policies

This point is closely related to the first point. However, the focus here is on comparing the insurance policies of the company you are buying from. Before committing to one insurance company, list out all your needs, then narrow your choice down to the company that provides all of that for you at an affordable rate.

Insurance premiums in Nigeria are not fixed. So, there’s always going to be one insurance company with a premium that suits your need and budget.

3. Don’t Opt for Minimal Insurance Coverage

The idea behind car insurance is to provide you with good coverage in case of any situations that arise with your vehicle. As such, full coverage is best than a minimal coverage premium. For instance, getting a third-party insurance policy when you own an expensive car is a mistake and a waste of money.

Instead of third-party insurance, go after comprehensive car insurance. Why? It offers better coverage in a situation something happens to your vehicle. That’s one thing third-party car insurance doesn’t do. It only covers the issues involved with a third party’s vehicle.

4. Ensure Your Car Has Anti-theft Device

Many car owners don’t know this but the higher the security level of your vehicle, the lower your insurance premium. Insurance providers believe that cars with anti-theft devices installed have a lower risk of being stolen. So, even if your vehicle does not come with anti-theft insurance, at least install one. It helps you save costs.

5. Don’t Choose All Insurance Add-ons

Add-on insurance is coverages that are not included in your comprehensive car insurance. Each insurance company in Nigeria has certain insurance coverage that belongs to the additional coverages a car owner can get.

Add-ons can help you get a better claim payout, but they can also drain a lot of your money. The trick to getting additional insurance coverage outside of those included in your comprehensive insurance is to focus precisely on what you need. Avoid selecting every single add-on, as this will increase your insurance premium, and being unable to continue paying for your insurance will affect your chances of getting claims in the future.

6. Always Share Accurate Information

Always be truthful and transparent with your insurance provider. Answer all questions with apt transparency, hiding nothing. Insurance is based on mutual trust, and you should learn to cultivate trust with your insurer. Hiding information from your insurance provider might affect your claims. If you don’t feel comfortable with your insurance provider, it’s best you seek another company.

7. Always Renew Insurance Premium Before Due Date

Your insurance company starts informing you about renewal in advance. The notifications might annoy you, but they are important. Once you get the notification, try as much as possible to renew your plan quickly. Not renewing your car insurance means that the insurance company will cease to insure you the moment the previous premium expires.

8. Avoid Huge Gaps Between Insurance Policy Renewal

Allowing a huge gap between the expiry date of your insurance plan and the renewal date will affect you greatly. It could lead to increased insurance premiums. To avoid situations like this from arising, at best, keep the gap minimal. If the insurance company feels a lot of time went by before you paid, they might also want to inspect your vehicle again before you make any insurance payment.

9. Always Switch To a New Plan Before Cutting Ties With The Other

If you feel like you would get better car insurance coverage from another company other than the one that’s currently insuring you. Then, switch to the other company first, and then reach out to your previous insurance provider. Most times, they’ll require you to present a document showing you’ve switched providers before they can cancel the policy.

10. Don’t Skip Policy Verification

Don’t make the mistake of not verifying your insurance policy on a reliable government database. Most insurance providers are scammy. To avoid situations like that, visit askniid.org, it’s the Nigerian Insurance Industry Database that keeps records of all legal vehicles insured by the insurance companies in Nigeria. 

All you need to do is visit the site, choose the vehicle policy you’ll like to verify and input the policy number or even your car’s registration number. The platform will display the status of your vehicle insurance. 

Why is this important? Any vehicle on a Nigerian road that is not found on the list will be impounded, and the driver will be penalized by the Nigerian traffic regulation. If your vehicle is not registered on NIID, it indicates that your car insurance is illegal.

11. Forgetting to Ask for an Insurance Certificate

Your insurance certificate is an important document once your car has been insured. It’s the document you’ll present to your insurance provider if you ever need a claim payout. Forgetting to collect your insurance certificate or misplacing it means you’ve completely lost any chances of getting an insurance payout from the company.

12. Avoid Buying an Insurance Policy Without Reading the Terms & Conditions

This is one of the major problems that a lot of car owners in Nigeria make. The excuse is that insurance terms and conditions are lengthy, and their language is often complex for the average reader. It’s still not a good enough excuse to avoid reading your insurance T & C. If you cannot read it, ensure there’s something to read and interpret the document for you.

Knowing the content of your insurance T & C before signing the agreements helps you not stay blindsided by what is contained in your vehicle insurance. A clause in the T & C could be a potential block from getting a claim payout. That’s why it’s important to thoroughly read through the entire document, word for word, making sense of every single clause and sentence.

Conclusion

These are the common mistakes car insurance owners make in Nigeria. Doing any of these could affect your vehicle insurance. Therefore, avoid them by every means necessary. Note that there’s no hurry when getting car insurance. Take the time to do it right.