Purchasing a car is an investment, and you should always protect your investments. This is the role that auto insurance plays. In this article, we discuss what auto insurance is, the types of car insurance and how to get the best coverage for your vehicle.
What is Auto Insurance?
Auto insurance is an insurance policy where the insurer (insurance company) protects the car of the insured (you) in the event of an accident, theft, loss, or damage. The validity of this protection is contingent upon the payment of the annual premium as specified in your policy.
Mishaps occur. It is possible for your car to be stolen, vandalized, or suffer natural damage. Car insurance relieves you of the burden and makes sure you won’t have to deal with an unexpected financial loss. It’s one of the most essential types of personal insurance.
Types of Auto Insurance
Here are the most common types of car insurance:
Third-Party Insurance
Third-Party Insurance is a type of insurance policy that protects you only from damages and losses caused to a third party but not your own. This is the most fundamental kind of auto insurance that you must have for your vehicle and is required by law.
Comprehensive Insurance
Comprehensive insurance is a type of insurance policy that covers both the loss and damage to third parties and to you and your vehicle as well. It offers full coverage for unintentional property damage to third parties, death, physical injury, and damage sustained by the insured vehicle.
Full Glass coverage is a no-deductible coverage that covers your windshield, windows, and sunroofs in the event of damage. It falls under comprehensive insurance.
Read more here on Understanding Insurance: Definition, Working, and Principles
Collision Insurance
Collision insurance covers you for accidents or damages that happen to your vehicle as a result of a collision with another vehicle or object such as a tree, pole, etc – basically, something that is your fault.
What does Auto Insurance Cover?
Here are what auto insurance policy covers:
Property Damage – The insurance policy can cover the damage to your car, another driver’s car, or damage caused to others’ property such as a fence, building or utility pole.
Bodily Injury – This covers the liability associated with injuries or death that you or another driver causes while driving.
What Auto Insurance Does Not Cover
Here are a few things auto insurance does not cover:
Natural Disaster – If any damage occurs to your car as a result of an earthquake, floods, hurricane, or any other natural disaster, auto insurance does not cover it. These natural events are regarded as “acts of God” and excluded from the insurance policy.
Theft of Personal Belongings – Your auto insurance policy will pay for the damages if your vehicle was broken into and vandalized. You won’t be reimbursed, though, if any of your belongings were taken during the procedure.
Carelessness – Your claim might be rejected by the insurance company if the loss to your car was due to carelessness on your part. Perhaps you left your key in the car or did not securely lock your vehicle. Hence, ensure you always have environmental awareness and practice safety caution.
Someone Else’s Car – You are not entitled to a claim if you are in an accident while operating someone else’s vehicle. Only claims made for the vehicle registered in the policy holder’s name will be reimbursed by the insurer.
NOTE: Ensure to always familiarize yourself with the nitty-gritty associated with your policy. This ensures you don’t find out about some exceptions too late.
Auto Insurance FAQs
- Is auto insurance coverage mandatory?
Third-party insurance coverage is mandatory. However, you can opt for comprehensive cover to get wider protection.
- What is the cheapest car insurance type?
Third-party insurance. It is the minimum and cheapest car insurance type you need by law in Nigeria. It also offers the least protection of all types of auto cover.
- What’s the best car insurance coverage to have?
Comprehensive insurance is generally the best car insurance coverage to have as it offers full protection. If you have just purchased a new car, a comprehensive policy is ideal.
- Do you need car insurance in Nigeria?
Yes. The minimum car insurance cover required in Nigeria is third-party insurance.
- What are the 3 types of car/auto insurance Leadway offers?
The three main types of car insurance coverage are Third party, Third Party (Autobase), and Comprehensive insurance.
- Can you have two car insurance policies?
On a single vehicle, you can have two auto insurance coverage. You can purchase a second insurance policy from a different insurance provider, even if your insurer might not wish to cover the same car twice.
Bottom Line
Now, we know what auto insurance is, what it covers and excludes. It protects you from damages, theft, losses, damages due to accidents, collisions, floods, and more!
