Buying a car is a form of investment, and whenever you make an investment you want to protect it. This is where auto insurance comes in. 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. This protection is valid upon paying an agreed annual premium according to what is outlined in your policy.
Accidents happen. Your car can be stolen, vandalized, or damaged by acts of nature. Auto insurance takes the headache off you and ensures you don’t have to bear the sudden financial loss. It is one of the basic personal insurance you need.
Types of Auto Insurance
Here are the most common types of car 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 insurance is compulsory and the most basic type of auto insurance that you need for your car.
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 provides comprehensive coverage for death, bodily injury, accidental third-party property damages, and those sustained by the insured car.
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 the difference between third-party and comprehensive 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 – If your car was broken into and vandalized, the car insurance policy covers those damages. However, if any of your valuables were stolen in the process, they will not be paid for.
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 – If you are driving someone else’s car and have an accident, you cannot make a claim for that. The insurer will only pay for claims that are made for the car registered under the policy holder’s name.
NOTE: Ensure to always familiarise 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?
You can have two auto insurance policies on one vehicle. Your insurer may not want to cover the same vehicle twice but you can buy a second insurance policy from another insurance company.
Now, we know what auto insurance is, what it covers and excludes. Here at Leadway, our auto insurance protects you from damages, theft, losses, damages due to accidents, collisions, floods, and more!
Ready to get started? Join millions of Nigerians whose vehicles are covered by Leadway, choose any of our auto insurance products today.