It is compulsory to have motor insurance in Nigeria in order to have a motor vehicle on the road. Many drivers choose to take out third party insurance as it is cheaper than the comprehensive but don’t realize it does not cover their own car. Drivers in Nigeria also only take out third party insurance as they see it as one of the vehicle documentations they have to carry about to prove their ownership of their vehicle.
Third party insurance - the first party is you, the second party is the insurance company and the third party is everyone else. With third party insurance you cannot claim for the car you are driving regardless of whether it is a brand new car, to have your car protected it is recommended to get the comprehensive cover for it.
There are a few things you should know about third party insurance:
· If you are responsible for a crash – you maybe be responsible for paying to repair another vehicle or covering its driver’s medical costs. Third party liability coverage protects you against these claims, covering the cost of damage and injuries sustained in a crash in which you were at fault.
· The money to pay for damages comes from the premiums. If premium has not been paid for a third party motor insurance, there won’t be any compensation whatsoever, in case of accident.
· If you go for a third auto party insurance from a registered insurance company, you will be able to save yourself of the cost associated with causing damage to others.
· If the insurer thinks you are not acting ‘in good faith’, they will refuse to pay that claim, cancel your insurance, report you to the police for fraud and put you on a blacklist.
· Claim you can make on an auto insurance policy is limited - find out the limit to the loss the insurance policy covers before taking out the insurance.
Where many drivers think it’s best to get third party insurance, it is in fact better to have comprehensive insurance as it covers everyone involved in an accident.