Car Insurance in Nigeria, What You Should Know

Life is unpredictable and bad things can happens to us even when we aren’t expecting them. It’s thus important to protect what we value from this uncertainties. Insurance has proven a great tool for ensuring that we’re reimburse to an extent when this circumstances occurs.

Car Insurance also called Auto Insurance is the type of insurance that protects you from losses relating to owning a vehicle. Because your vehicle is one of your most prized possessions, it’s therefore integral that you have an insurance for protection.

It’s important to note that as stipulated by the Government under the Motor Vehicle Third Party Insurance Act of 1945, all vehicle owners are mandated to have a minimum of a Third Party Insurance. Continue reading to know more about a Third Party Insurance.

They’re different types of car insurance available in Nigeria with each covering specific cases. We have explained in details the different types of insurance available for anyone driving a vehicle in Nigeria.

Act Only Car Insurance

Like we earlier mentioned this type of car insurance is mandatory. It protects the insured against damages to a third-party property in an event of accident.

Suppose you have this insurance coverage and got involved in an accident, this insurance will cover the losses inflicted on the third-party.

Summary Of Act Only Car Insurance:

  • It covers losses caused to the third-party only in accidents cases regardless of who’s at fault.
  • It doesn’t cover the damages or property loss on the part of the insured.

Third Party Only Car Insurance

This is similar to the one we already discussed above except that it stretches further to cover for theft, fire or attempted theft leading to damage.

This means that the third-party is fully protected not only in accident cases. However this insurance cover is still disadvantaged since it doesn’t protect the insured.

Summary Of Third Party Only Car Insurance:

  • This covers loss incurred on the third-party in cases of accidents, theft, fire and vandalism.
  • The insurance policyholder isn’t protected by this insurance policy.

Third Party, Fire and Theft Car Insurance

This offers coverage to both the insured and the third-party in an event of crash or collision. The insured is also protected from car theft, fire and vandalism.

The only disadvantage is that the third-party is protected only during accidents and will not be covered in non-collision cases.

Summary of Third Party, Fire and Theft Car Insurance:

  • It protects both the policyholder and the third-party on event of accident.
  • It only covers the insured on event of theft, fire and vandalism.
  • It doesn’t cover the third-party on cases outside car crash, collision or accident.

Comprehensive Car Insurance

This is unarguably the best type of car insurance available for car owners, it offers full protection to both the insured and the third-party. On cases of accident, theft, fire and vandalism the insurance holder and the third-party are covered.

However the comprehensive car insurance usually comes with higher premiums compared with the other types of auto insurance.

Learn more about premiums and other terms used in insurance.

Summary Of Comprehensive Car Insurance:

  • It covers both parties, the insured and third-party on event of accident, theft, fire and vandalism.
  • It’s the best type of car insurance and come highly recommended.
  • The premium is usually higher than the others.

What’s not covered by Comprehensive car insurance?

  • General ageing, wear and tear
  • Damage by a person driving without a valid driver’s license
  • Mechanical or electrical breakdown, failure
  • Damage by a person under the influence of alcohol or drugs
  • Depreciation, any consequential loss
  • Loss/damage attributable to War, Mutiny, Nuclear
  • Damage to tyres and tubes, unless damaged during an accident
  • Loss or damage outside Nigeria except the Policy is extended.

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