This post explains lots of information on how to choose the best car insurance company and policy.
Once you purchase a brand new car, fairly used or tokunbo, the next thing you will definitely consider is insuring the car. A big question you will ask yourself is “How do I choose the best vehicle Insurance Companies in my country?”
It is wrong to buy a new car and immediately hit the road with it. By so doing, you are not only leaving yourself at the mercy of the task force on the roads in charge of inspecting vehicles but also you are exposed to the risk of third-party damage which is not covered.
In the world today, there are mainly two types of vehicle insurance offered by most insurance companies. They are;
- Third-party auto insurance policy.
- Comprehensive auto insurance policy.
Table of Contents
Third-Party Auto Car Insurance Policy
The third-party auto insurance policy is compulsory and protects every car owner from only damages their cars may cause other parties.
For example, if your car ran into a roadside shop and caused serious damage. Or let’s say your car knocked a pedestrian down and inflicted severe injury. It can also be that your car had an accident and caused damage to another car.
All these issues may end in a serious argument may be in the police station.
Most drivers don’t understand what is meant by third-party auto insurance. The majority of Nigerian drivers just see it as vehicle documentation they have to carry about to use and prove their ownership of their Vehicle.
If you choose third-party auto insurance from a registered and reliable insurance company, you will be able to save from the cost associated with causing damage to the third party.
If your car injured a pedestrian, the insurance company would have to cater for the medical bills and every other bill associated with it.
It is also necessary to point out that – third-party auto insurance only pays for damages your car caused to third parties, and it totally ignores any loss you personally incurred during the process.
Comprehensive Car Insurance Policy
Comprehensive auto insurance is more than just third-party auto insurance. In comprehensive auto insurance, the Insurance company indemnifies for both your personal loss as well at that of the third party.
If you need to insure against vehicle theft, or vehicle fires, then what you need is a comprehensive auto insurance policy.
Most registered car dealers will give you comprehensive auto insurance coverage as an option when you are buying a car. The car dealer or the insurance company may also offer you a car-tracking device.
You have to know that car dealers are different from insurance companies, but only have a high level of relationship with them. Therefore, make sure the insurance company your car dealer is working with is a registered insurance company with a good reputation.
To get the best comprehensive auto insurance policy, make sure that you contact a registered insurance company that provides auto insurance services or rather you can use the services of an insurance marketer.
A comprehensive auto insurance policy will cover private cars, commercial vehicles, and even Motorcycles (okada), and Tricycles.
How to Choose the Best Car Insurance Company
There are several auto/car insurance companies in Nigeria presently. We see insurance marketer every day in our business places trying to convince us to register with their insurance firm.
Now the big question is, how do you know which of the insurance companies you will choose? The list below are things you should look for before choosing an insurance company.
1. Company’s History and Reputation
The reputation of the insurance company is very important. An insurance company with a poor reputation might be a mistake if you decide to choose it. Using them, you may find it difficult to get your claims if a risk occurs. And for history, choose only the auto insurance company with very good track records.
2. Company’s Financial Strength
Information about the financial status of an insurance company can be found in its annual report. If you can’t interpret an annual report of an insurance firm – then look for someone who can.
An insurance company with poor financial strength may not have the capacity to pay full indemnity if an insured risk occurs.
3. Quote and Bundle Offers
There is what is called a franchise clause and an excess clause in an insurance policy. Make sure you are aware of what nature of insurance coverage you are entitled to, and at what level of damage can they indemnify you, in terms of value.
This is very important, to digest the terms and conditions of an insurance policy before accepting it.
4. Use a licensed Insurance Broker
An insurance broker is a professional and a specialist in insurance, someone who understands risk management to the fullest.
A broker will help you identify the kind of risk you should insure against and how to best manage those risks in other ways.
Watch this video to learn how to save on car insurance.
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