Motor insurance Policies
Motor insurance is a necessity for car drivers in Nigeria. The costs for repair/replacement of the cars or other property, or medical costs of the victims are far too high to risk being without coverage. Most motor insurance products are divided into two categories - third-party liability and first-party insurance.
The owner of the policy is the first party, who has contracted with the second party, the insurer, for the coverage; and the third-party is the other person(s) in the accident, or the person(s) whose property the policy-owner damaged.
There are two types of third-party liability policies:
· Bodily injury liability – this pays other people for damages the policy owner has done to them, such as medical expenses , lost wages , and pain and suffering
· Property damage – this pays other people for damages done to their property
There are many forms of First-party coverage, out of which some are essential. First-party coverage is used to repair damages to the policy-owner and his or her passengers in the event that:
· The policy owner was not at fault in the accident
· No one was at fault in the accident
· The driver at fault cannot be found (e.g., a hit-and-run)
· The driver at fault does not have adequate means to repair the policy owner’s damages
The most important types of first-party coverage are collision, comprehensive, uninsured/under-insured motorist, and Medical Payments/Personal Injury Protection (PIP) insurance:
· Collision/Comprehensive - Collision coverage guarantees the policy owner’s car will be repaired or replaced in the event of an accident, no matter who was at fault.
· Uninsured/Under-insured – Uninsured/Under-insured Motorist coverage pays the policy owner and his or her passengers for pain and suffering, lost wages in the event that the driver at fault cannot be found, has no insurance, or has too little insurance to cover the damages.
· Medical Payments - Covers medical and funeral expenses to the policy-owner and his or her passengers, regardless of who is at fault in the accident.
· Non-Policy-Owners - Pay out appropriately regardless of who is driving the car at the time of the accident.
· Stolen Cars - The owner of a car is not responsible for third-party damages resulting from or during the theft of his/her car.