Comprehensive Car/Vehicle Insurance In Nigeria

In our previous post, 3rd party car insurance in Nigeria, we explain extensively what that form of insurance is all about. Major advantages, as well as limitations, were treated appropriately so that as many of the individuals who wish to undertake or purchase such insurance policy should be able to know what they are up to.

Another important point which is worthy of note in that article is that in the latter part of that post we've also taken the time to state down that third Party Motor Insurance in Nigeria has its legal backing in Section 68 of the Insurance Act of 2003. For the full article, click here.

Today, unlike the third party car insurance which is mandatory, the comprehensive car insurance is optional in Nigeria. In Nigeria, having a minimum 3rd party insurance is what is required by law.

However, due to the limitations involved in third party car insurance and in order to have a peace of mind, it is advisable for one to purchase a comprehensive car insurance. Doing this will also prevent certain financial costs. In the course of this article, we shall be sharing with you all that you need know about comprehensive insurance and the various advantages.

Comprehensive insurance- What is it all about?
Unlike third party insurance which is known to be the cheapest form of insurance in Nigeria, comprehensive insurance is expensive. In our third party insurance article we introduced at the preceding section of this article, we've stated clearly that because of cost consideration, car owners rather than purchasing comprehensive insurance, a lot of them resort to third party.

But, it's important to note that that form of insurance as the name implies has a lot of limitations. And for car owners in Nigeria to have a peace of mind, it is nice for one to purchase comprehensive insurance. This is so in view of the lots of coverage that the comprehensive form of insurance offers concerned persons. The coverage that this form of insurance covers shall be outlined in the course of this article so continue reading.

Okay, having outlined that, to proffer answer to the question; what is comprehensive insurance? Let me quickly say here that comprehensive insurance is a coverage that helps pay to replace or repair your vehicle if it's stolen or damaged in an incident that's not a collision. This insurance typically covers damage from fire, vandalism or falling objects (like a tree or hail). According to experts, if you're financing or leasing your car, your lender likely requires comprehensive coverage. If you own your vehicle outright, it's an optional coverage on your car insurance policy.

Nowadays, road accidents are on the rise in Nigeria. When your car is involved in an accident, the damages caused to your car becomes your own problem. What this means is that you will end up spending a large sum of money in car repairs or buying a new car. Let's see an an example of a vehicle that you may own with a value of #1,000,000 which is involved in an accident. Tabulated below will be the breakdown of some of the costs you will pay for an “average impact” - 

DAMAGES              COST
Bonet                        25,000
Bumper                    13,000
Fender                      13,000
Headlight                 7,500
Side Mirror              7,500
Grid                          5,000
Total                        #71,000

In the same vein, if you own or drive a popular car, chances are it can be stolen and you will be left frustrated. This directly leads to a financial loss as not only you will lose a priced asset of yours but you will also spend more to buy a new car. Furthermore, with changing climatic conditions and poor infrastructure, roads most especially, there are more flood prone areas now than ever before which has a potential to seriously damage your car. This again becomes your problem if you are not comprehensively covered. These and many others, calls for comprehensive insurance, one of the smartest financial decision which one would make to protect his or her car.

Without wasting much of your time, let's see the various aspect that comprehensive insurance covers for your and your car.

Comprehensive Insurance - What and what is it covered?
Unlike the third party insurance, comprehensive also helps cover damage to your car that is not the result of a collision. Here are the list of the damages;
- Damage caused by theft
- Damage caused by vandalism
- Damage caused by Fire
- Damage caused by Natural disasters (like a hurricane or a tornado)
- Damage caused by Falling objects
- Damage done to your car by animals
- Damage caused by A civil disturbance (like a riot that results in damage or destruction of your car)
- Damage sustained from hitting an animal or bird
- Damage to third party
- Glass damage

Comprehensive Insurance - what is not covered
Just like 3rd party insurance, there certain damages you may sustain that are not covered by the comprehensive insurance. Here are the damages that are not covered by the comprehensive car insurance;
- Damage to your car from a collision
- Damage to another person's vehicle from a collision
- Your (or your passengers') medical expenses after an accident

Key Points Regarding Comprehensive Car Insurance in Nigeria
In Nigeria, not many people have a good idea of how insurance works talk about how one can acquire it. For those who do not have a better knowledge of insurance is all about, a customer purchases insurance so that in case of unforeseen circumstances, such as a car accident or damage caused by any of the causes we outlined above, the insurance company will take responsibility of the cost.

The insurance company receives what is known as premium payment from clients. On the other hand, when it comes to vehicles, one of the products that are usually offered to car buyers and owners is known as comprehensive car insurance, which is what really triggered this article. There are certain regulations put in place Nigeria which impose requirements on people who own and drive vehicles. To a certain extent, these rules will have an impact on the choice to buy certain kinds of car insurance. Here are some of the key points regarding this matter.

1. Comprehensive Car Insurance in Nigeria is Not Mandatory
Just like every other country, what is actually required by law in Nigeria is third party car insurance and not comprehensive car insurance. If you wish to learn or read more about the third party insurance, you can click here. There are mark differences between this two kind of insurance. The first one will only be relevant in the event you cause damage or injury to some other property or person.

In other words, if you are driving down the road and you accidentally hit a pedestrian, the third party insurance will kick in and help to take care of that person’s medical costs. Or if you accidentally backed into another vehicle while pulling out of a parking spot, your third party auto insurance will help to pay for the repair costs for that other vehicle. This type of insurance is mandatory because it helps to ensure that if a driver hurts someone or damages property, then there will be insurance to handle the expenses of the victim.

2. Get Comprehensive Car Insurance in Nigeria for Peace of Mind 
In one of our articles on insurance, we made it clear that third party car insurance only covers or takes care of the victim. Obviously, if you accidentally back into another car, there will also be damage to your vehicle. Therefore, the third party car insurance is not enough. That form of insurance will not handle the costs for your own car’s repairs, so you will have to pay for this out of pocket. As we all know, this can be a tremendous and difficult financial burden.

However, there is good news. The good news is that this unfair advantage can be checked through the use of the comprehensive car insurance in Nigeria. You can stroll back to the previous section of this article for the comprehensive areas that this form of insurance is set out to cover.

If you've done that, it is clear that getting comprehensive car insurance in Nigeria can help to spare you from financial worry, and at the same time, give you more peace of mind. 

In Conclusion, Why Buy Comprehensive Coverage?
In case you're wondering whether you should buy comprehensive coverage, if yeah, here are a few considerations:
- Comprehensive coverage may be required by your car's lender.
If you're leasing or financing your vehicle, your lender may require you to have comprehensive and collision coverage until the vehicle is paid off.

- How old is your car and what is it worth? 
If you have paid off your car, comprehensive coverage is optional. It may be a good idea to find out the Kelley Blue Book value of your vehicle.

Would you be able to pay that amount to repair or replace your vehicle if it were stolen or damaged in an accident?
If you can't afford to pay much out of pocket, then buying optional coverage, like comprehensive coverage and collision coverage, may be a smart investment.

- How much are the annual premiums for comprehensive and collision coverage? 
The Insurance Information Institute suggests that you take the amount you'd pay in one year for comprehensive and collision coverage, and multiply that number by 10.

Is your car worth less than that number? 
Then comprehensive and collision coverage might not be a cost-effective option for you. In other words, you might want to talk to your agent about whether it makes sense to include these coverage on your car insurance policy.

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