In Nigeria, Auto insurance basic(s) is very clear to understand you can’t drive if you don’t have insurance. However, full coverage can be expensive. If you want to save money and you have enough savings to replace your own car in the event of an accident. You must know what an auto insurance basic entails. it may be wise to go with third-party motor insurance.
Auto Insurance basic in Nigeria: Terms Explained
Before we continue, let’s stop and review some auto insurance basic terms. In an insurance contract, the first party is the person who is buying the insurance; in other words, the first party is you. The second party is the auto insurance company. The third party is the other person or people that are involved in the accident.
- Auto insurance basic #1: What is Third Party Motor Insurance?
Third-party motor insurance is much affordable than a full auto insurance policy. The negative part of it is that it only has coverage for the third party in the event of an accident.
Any damage that happens to your car or to its body part will not be covered. Unless you have the money to pay your own way when an accident occurs. Without this, you will be stuck without any means of transportation. If you are to opt to get the basic third party motor insurance coverage when you signed up to get insurance.
If you have a second car and separate medical insurance that will cover the costs of hospital bills when you have a road accident, third-party motor insurance might be the right choice. Otherwise, you should a second thought of spending some extra money to get comprehensive motor insurance.
Read Also: Health Maintenance organization in Nigeria
- Auto insurance basic #2: What is Comprehensive Motor Insurance?
Comprehensive motor insurance covers virtually all the costs of having an accident. If you are involved in an accident, you will be given money to help cover damage to your vehicle if your vehicle is fully covered. Also if your vehicle is stolen or is so damaged that it is impossible to repair.
Comprehensive motor insurance will cover the cost of renting a car for a limited period of time. Some auto insurance basic such as types of comprehensive motor insurance even cover towing costs, roadside assistance in the event that your car has a flat tire while driving and more.
Although the cost of comprehensive motor insurance is much more expensive compared to third-party motor insurance, opting to go with full coverage may help you save money down the line if you are unlucky and get involved in a car accident.
- Auto Insurance basic #3: The Penalty for Driving Without Insurance
If you are among one of the 2 million drivers who prefer to get behind the wheel without an auto insurance in Nigeria. It is advisable that you contact an insurance agent immediately and get covered to avoid facing the punishment. According to the Nigerian Insurance Act of 2003, drivers can obtain a fine of up to N250,000 and/or imprisonment for 1 year if caught on the road without insurance. Don’t risk it!