Losses and risks are inevitable, but human societies have created novel ways of reducing the burden of loss, the most effective being insurance. 

Insurance is a means whereby a person pays some sum of money called premium in order to indemnify self against loss of a belonging worth much more than the premium.

When the belonging being indemnified is an automobile – Car, SUV, Bus, Truck, Pickup, etc such insurance is called a auto insurance or vehicle insurance. It may also be called motor vehicle insurance or car insurance.

In Nigeria, there are two types of auto insurance offered by most insurance companies in Nigeria, namely third party and comprehensive auto insurance policy:

Third party auto insurance is compulsory in Nigeria and protects car owners from losses caused by their cars on other people. For example, if your car runs into a pedestrian, kill someone, some ones property, or another car or you accidentally break another cars headlamp. However, in most such situations Nigerians will end up arguing or in a police station.

This is because although Third party auto insurance in compulsory most drivers do not know what it means. In fact, most Nigerian drivers just see it as one of the vehicle documentations they have to carry about to prove their ownership of their vehicle. This ignorance has allowed for lots of illegal insurance companies issuing fake and worthless third party auto insurance to unsuspecting Nigerians.

If you go for a third auto party insurance from a registered insurance companies, you will be able to save yourself of the cost associated with causing damage on others. Assuming your car injured a pedestrian, the insurance company will pickup the medical bills saving you from being torn apart by the relatives of the injured.

Third party auto insurance pays for damages your car cause on others and ignores any loss you personally incurred in the process. Let us say you have a third party insurance and your car ran into another car and deformed the door and as a result, your bonnet was also deformed, the insurance company will only pick the bill of the loss your car caused on the other car leaving you to your fate. To protect yourself and any third party go for a comprehensive auto insurance policy.

Note that the claim you can make on an auto insurance policy is limited. So, find out the limit to the loss the insurance policy covers before subscribing. For example, an auto insurance policy may only cover loss up to a certain amount say N1,000,000. This means that if the property you damaged is worth more than that the insurance company will only provide N1,000,000.

To get a third party auto insurance policy contact a registered insurance company or use the services of an insurance marketer.

Comprehensive auto insurance is third party insurance and more. The more being that, Comprehensive auto insurance also indemnifies you from any personal loss. If you want to indemnify yourself against car theft, vehicle fires then you need a comprehensive auto insurance policy. Although not compulsory under Nigerian law, we recommended comprehensive auto insurance for all vehicle owners.

Most authorised auto dealers will give you comprehensive auto insurance cover as an option when buying a car. The auto dealer or an insurance company may also offer you a car-tracking device.

Note that auto dealers are not insurance companies, but only have relationship with them. So, make sure the insurance company the auto dealer is working with is registered and has good experience and reputation in auto insurance industry.

To get a comprehensive auto insurance policy, contact a registered insurance company or use the services of aninsurance marketer. Comprehensive auto insurance policy covers private cars, Commercial vehicles (Taxis, Buses, and Hire Cars), Motorcycles, Tricycles, etc.

The regulator of insurance in Nigeria is the National Insurance Commission, NAICOM. Visit NAICOM website at www.naicom.gov.ng for an up to date list of registered insurance companies in Nigeria. You will also find lists of registered insurance brokers and reinsurance companies.

Some Insurance companies with good reputation include:

This information is credited to writers at www.naijatechguide.com online