Two editions ago this column dwelt on how you can live smart with insurance cover. Here’s a recap: If you have insurance cover for most aspects of your life where an insurance cover is possible, that will come handy especially in these times of economic uncertainty when every out-of-pocket spending feels like they are draining blood out of your system.
This week, we return to the matter of smart living. First, let me ask, do you have insurance cover for your car? I’m sure most car users in Nigeria would have Third Party Motor Insurance because it is compulsory. It is against the law not to have it, so most people get it to avoid trouble with the Federal Road Safety Corps operatives. Not bad. But let’s talk about the big one: comprehensive car insurance.
It is often said that a man who has a car is like a man who has a second wife. It needs maintenance. It demands attention. No doubt, while some people see a car as a luxury item, others see it as a necessity, especially when the car facilitates one’s job and, therefore, ability to make more money. Whatever the case, we understand that a car is a form of investment, and whenever you make an investment you want to protect it. Every vehicle owner knows the risks involved in plying Nigerian roads amidst an array of angry motorists. Your car is most likely to come out with a dent because even when you observe the roads safety rules, many do not.
Bassey learnt the hard way. A promising young realtor who had just achieved his goal of a brand new car to boost his image and enhance his performance, Bassey was driving home after work to celebrate with friends and family when, out of the blues, a rickety bus smashed into the rear of his car, causing severe damage to the bumper and the rear lights. He cried. He fumed. He screamed. The bus driver lay prostrate on the ground pleading. People around gathered and joined in the pleading. In the end, Bassey had to cough out over five hundred thousand naira for the repairs. It was so painful that he had to approach an insurance firm to take a comprehensive car insurance. If he had been smart enough the first time, he would simply have checked the level of damage on his car and called his insurer right away. He would have used the half a million naira for another pressing need. But as they say, better late than never.
About comprehensive car insurance
A comprehensive car insurance is a policy where the insurer (the insurance company) protects the car of the insured (policyholder) 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 the package. Car insurance takes the headache off you and ensures you don’t have to bear the sudden financial loss which may occur unexpectedly.
The policy features three types of coverage. Own-damage protects the insured vehicle for coverage against theft and fire, natural disasters and accidents. Third party liability plan safeguards the car owner from legal liability arising from collision with a third party. For instance, if an insured vehicle with this coverage causes an accident where a third party was injured or dies, the insurance company will pay the third party/beneficiaries for the loss. Comprehensive car insurance policy also provides refunds to drivers for medical expenses resulting from accidental injuries.
This plan can be purchased by any individual or entity who owns a vehicle – business entities, clubs and associations, local, state and federal governments, religious houses and schools.
What you need
The four most important things you need to purchase a comprehensive car insurance plan are chassis number, engine number, vehicle registration number, and photographs of the insured vehicle.
What comprehensive car insurance does not cover
Much as comprehensive car insurance covers for loss or damage to insured vehicle arising from accident regardless of who is at fault and gives you rest of mind knowing that you won’t pay for any expensive repair work when involved in a collision, it is important to know that you are on your own if any of the following scenarios occurs:
(i) When a driver is driving the car without a valid driver’s licence.
(ii) A policyholder who got involved in an accident because of intoxication with drugs or drunk while driving.
(iii) If damage happened to a policyholder’s vehicle as a result of war or bombings.
(iv) 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 policyholder’s name.
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.
Queen, a personal finance advisor, can be reached via [email protected].
