Types Of Car Insurance You Should Know In Nigeria

We often wish life is more predictable, and if possible, make only good things come to us. But the truth is, that life is full of uncertainties, and bad things do happen. This makes it important to protect things that matter to us. A car is a prized possession, and hence, it’s important to have it protected via car insurance.

Table of Contents

Car insurance, also called auto insurance, like any other insurance cover, is used to protect the individual and cover any financial loss which may occur from operating regular motor vehicles such as cars, buses, motorcycles, etc, and special vehicle types like tractors, road rollers, excavators, etc.

It’s mandatory that all car owners in Nigeria have at least one of the types of car insurance. Oftentimes on the road, policemen will require you to show a car insurance certificate before you will be allowed to go scot-free.

A lot of people in Nigeria have the wrong perception about car insurance and so are reluctant to even have their cars insured. Here are the advantages of having your car insured.

Why You Need To Have Your Car Insured

It’s mandatory under the law, hence having your car insured saves you from harassment from law enforcement agencies.
It offers financial protection incurred from third-party damages.
It saves the cost of repairs or financial burdens incurred from theft or vandalism.

Types Of Car Insurance In Nigeria

Act Only Car Insurance Cover:

This can be referred also as Motor third-party insurance or third-party liability cover. According to the law, it is important every car owner has at least this type of car insurance. It’s the minimum and cheapest form of insurance you can have for your car.

This type of insurance provides protection against damages from accidents caused by you to a third party.
Advantages: It provides financial relief to the insured for damages caused to third-party vehicles.
Disadvantage: The insurance is limited to a car crash or collision-induced damage.

Comprehensive Car Insurance Cover

This type of insurance is often regarded as the best form of insurance. As the name comprehensive implies, it provides protection against a wide range of uncertainties including theft, accident, fire etc. Under comprehensive car insurance cover, both the insured and the third party get protected in the event of an accident.

Advantages: It provides insurance for both the insured and third parties.
-It provides comprehensive insurance for theft, fire, vandalism, and collision-induced damage.
Disadvantages: It’s expensive

Third Party Only Car Insurance Cover

Third Party Only Car insurance, provides insurance that covers losses caused to third-party vehicles or properties. A limit of this type of insurance cover is that damages to your own car are not accounted for, even if it’s stolen or vandalized.

Advantages: The third party is fully covered in this Insurance, hence the insured is relieved of the financial burden.
Disadvantage: No insurance is provided for the insured person’s car or property

Third Party, Fire and Theft Car Insurance

This type of insurance is similar to third-party-only car insurance. Insurance is provided for any damage caused to the vehicle or properties of a third party, but it also provides insurance for your own car if it’s stolen or damaged by fire. You can also be able to make a claim should your car be damaged by attempted theft.

Advantages: Both the insured and third party are covered during an accident
Disadvantage: The third-party cover is limited to damage resulting from accidents in this package.