Firstly, it’s important to restate that Third Party Motor Insurance is compulsory because of the need to ensure that “when motor accidents happen on the road, and lives and properties are lost, their owners are compensated.”
Yes, your Third Party Motor Insurance covers even the death of persons in the affected vehicle!
Remember, on the road are all sorts of vehicles (motorcycles, tricycles, cars, trucks, buses, SUVs, lorries and heavy machines) used by individuals, organizations and governments for private and commercial purposes.
The minimum annual premium under commercial vehicles is N3,000 for motorcycles with Third Party Property Damage Limit of N1m while N15,000 is the minimum annual premium under private with Third Party Property Damage Limit of N3m plus Ecowas Brown Card that allows you drive across West African countries.
To take care of other risks associated with having a vehicle, namely fire, theft, flood and riotous attacks, other coverages were introduced under Motor Insurance. These are:
• Third Party, Fire & Theft – It covers your vehicle against the risks of damage to the lives and properties of others, fire that may burn the vehicle and possible theft of the vehicle whether parked or in motion.
This used to be offered to persons with high moral standing in our society but as we lost societal values and had more persons with high moral hazards coupled with limited means of knowing them, insurance companies in Nigeria were discouraged from selling Third Party, Fire and Theft Motor Insurance Policy.
Of course, in response to the demand of policyholders, the insurers chose to offer what is today known as Enhanced Third Party Motor Insurance. This allows the policyholders to get certain level of compensation from their compulsory Third Party Motor Insurance policies when accidents occur.
Meaning it is not only the Third (Other) Party that gets compensated as it’s typical for the compulsory Third Party Motor Insurance, but also the policyholders.
The annual premium for Enhanced Third Party Motor Insurance is dependent on your insurer of choice.
• Comprehensive Motor Insurance – As the name implies, it means that all potential risks mentioned earlier are covered.
It is however important to note that you will be required to buy extended cover for Strikes, Riots and Civil Commotion (SRCC), which ensures you’re compensated if damages to the vehicle or loss of lives are the results of SRCC. Some insurers now offer this as part of the standard Policy.
A unique value of the Comprehensive Motor Insurance is the tracking device provided by Insurers to ensure your vehicle is found if stolen. This effectively reduces the risks you face especially when you’re using a brand new vehicle.
Stories abound of vehicles that were burnt by armed robbers who discovered that the tracking system in the vehicles they stole could not be demobilized; yet the claims were paid, and promtly too, by insurers.
The annual premium for Comprehensive Motor Insurance is 5 percent of the value of your vehicle.
• Pay-As-You-Drive Motor Insurance – This cover is now available in Nigeria as a solution offered by selected partnerships between insurtech firms and insurance incumbents to make Motor Insurance more accessible and pocket-friendly. It enables you enjoy the best of the two worlds in Motor Insurance, being Third Party and Comprehensive; so you pay N15,000 for Third Party but only as you drive for Comprehensive! Gerrit?! Believe it!
In all cases, it should not be a struggle when it comes to claims, if the terms and conditions of the Motor Insurance Policy are well understood and interpreted by you and your Insurers. Even in the case of multiple accidents where your vehicle causes accident to others, your Third Party Motor Insurance would pay for all except negotiated with other insurers.
Always verify the authenticity of your Motor Insurance Policy via this link and endeavour to buy directly from financially strong insurance companies.
Let’s make Motor Insurance work for us in Nigeria.