Many people buy car insurance erroneously believing that should an accident happen, they will recover all their losses or expenses irrespective of the circumstances surrounding their claim. As a result of this they are frustrated whenever an insurance company turns down their claim for whatever reasons.
There are mainly three types of motor vehicle insurance and they are Third party only; Third party, Fire and Theft; and Comprehensive.
All drivers in Nigeria must by law have at least third-party insurance. This means that you are insured against any claims made by drivers and other road users whose vehicles are damaged in an accident that was your fault but you cannot make claims for damage to your own car or injuries you or your passengers sustain unless the accident was the fault of another person.
Comprehensive Motor Insurance
Comprehensive motor vehicle insurance is one of the various motor vehicle insurance policies. This provides cover for damages caused by other incidents in addition to the damages to the car as a result of accidents.
Comprehensive vehicle insurance is not required by law, but it is a good idea to take one depending on the value of the car you are driving. It allows the policyholder to claim from his insurer for accidents that occur as a result of his faults and also when fault cannot be established against him or another person including if you return to your parked car and find it has been damaged by an unknown vehicle.
Comprehensive insurance doesn’t just mean that you’ll be able to claim on your insurance if something happens. It also gives you the peace of mind that, whatever happens on the road, your financial losses should be limited to the value of the excess on your policy.
Scope of Cover
Theft and vandalism: Comprehensive vehicle coverage will protect you from the damage done to your car by someone else. You will be covered, when someone breaks in to your car to steal your things or the car itself.
Fire: Fire caused by explosions, self-ignition and other natural and accidental causes are covered by a comprehensive motor policy.
Natural disasters, including hurricanes, lightning and storms: Natural calamities such as hailstorms, flood, hurricanes, lightning, and high wind can cause serious damage to your car. In such cases, the cost of material and labour required to fix the vehicle will be covered by comprehensive vehicle insurance policy.
Falling objects: Comprehensive insurance coverage will protect you from the damages occurred in your car as a result of falling objects like a tree, or debris from a construction site.
Animals: Damages caused by striking an animal with your car are covered under comprehensive insurance coverage. It also covers, when an animal or bird flies in to your car and causes damage.
Miscellaneous: Other cases like, explosion, self-ignition, and towing charges incurred after an accident are also covered under comprehensive auto coverage.
A comprehensive insurance policy does not cover the loss of damages caused by: Wars, natural and man-made disasters: These are out of the scope of insurance.
Riots, civil commotion and malicious damage: These can be covered by paying additional premium to the insurer.
Car being driven by an individual who does not hold a valid driving licence. The driver being under the influence of drugs or alcohol at the time of accident Mechanical breakdown of the vehicle or the general wear and tear of the vehicle Damages caused to the tyres unless the car is also damaged
This is a condition in the insurance contract which states that the policyholder will take care of the first part of the loss up to an agreed amount after which the insurance company will contribute the rest. This condition ensures that the owner takes good care of the vehicle knowing that fully well in advance that he will contribute to the loss if it happens.
The premium paid for comprehensive motor vehicle insurance depends to a large extent on the amount of excess agreed. For example, if you have opted for a higher excess, then you may have to take care of more of the damages before the insurer starts contributing to the loss. However, a higher excess means the premium paid is also low and vice versa.
This risk can also be bought back by paying an extra premium to the insurer and this ensures that should anything happen, the policyholders will not contribute to the loss at all.
Given the extra protection it provides, you would expect a comprehensive policy to cost more than a third-party or third-party, fire and theft policy for the same driver and the same car.
The rate of comprehensive motor insurance also depends on the type of car insured. The insured is expected to pay more for some types of cars and models that incurs huge repair costs but this could be reduced with added safety features will be eligible for a discount too.
Breakdown cover: comprehensive policies are unlikely to include this as standard. You may be able to get cover from the same insurer by paying extra.
If your car is involved in remember not admit at the scene that it was your fault because this could make your policy invalid.
Exchange names and other details with the other drivers and get details of any independent witnesses. If someone refuses to give you their details your insurer may be able to trace them through their vehicle registration number
Tell your insurer about the accident straightaway, even if you don’t want to make a claim
If someone is injured, show your insurance certificate or cover note to the police. If you can’t do this at the scene take the documents to the police station within seven days
Take photographs that you may be able to later use as evidence if you need to make a claim.
You should keep losses to a minimum and keep evidence of them and if you need to hire another vehicle it should normally be similar to your own vehicle.
Get a claims form from your insurer or write to the other driver or their insurer, giving details of the accident and the other driver’s policy number.
Tell your insurer about any independent witnesses and send them witness statements if you can.
If you used a broker or agent to buy your policy they may be able to help you. Make sure you keep copies of all documents and letters.
Note that if you have comprehensive policy you would be able to claim from your own insurer, but you may lose the “no claims bonus” if the insurer could not recover the money from the other driver’s insurer.
You can still claim from the other driver’s insurer for any injuries or losses not covered by your own policy. These are called uninsured losses and can cover alternative transport while your own vehicle is being repaired, loss of earnings, personal injuries and the excess on your policy.
You should not get your car repaired without your insurer’s permission since they may want to send someone to inspect it and you may have to use an approved repairer.
If you are asked to get your own estimates you may have to ask your insurer for their approval before going ahead with repairs.
You may also have to pay some of the repair cost yourself if your vehicle is in a better condition after repairs than it was beforehand.
If your insurer decides that it is not economical to repair your car they should offer you the car’s market value at the time of the accident. They normally then take the car from you but you may be able to negotiate to keep it.
If you don’t agree the amount you’re offered is fair, you will need to give the insurer or insurance broker evidence to show that your car is worth more. For example, you could give prices of similar cars for sale in the local area. You can also get a valuation from an independent qualified engineer, if you wanted to pay for this.
Once the claim is settled, your insurer will keep the damaged car. If you want to keep it instead, you can negotiate with the insurer. The insurer will only let you keep the car if it’s possible to repair it to make it roadworthy again. In this case, money will be taken off the amount you get, to cover the cost of the salvage value of the car.
Your insurer should get your consent to send your written-off car to the scrap yard for sale or to be broken into parts. If they don’t get your consent, then scrap the car and decide not to settle your claim, you are entitled to claim the salvage value of the car.
Buying Comprehensive Cover
Comprehensive car insurance is optional and most people decide not to purchase this in order to minimise premium cost. However one needs to consider all options and risks he is facing using the car before deciding whether to get a comprehensive cover or not particularly if one is using the vehicle in an area that is prone to vandalism, theft and high repair costs.
If you want to buy comprehensive motor insurance and still maintain your premium to an affordable level, then opt for a high excess. Comprehensive insurance have their limits so the vehicle owners need to consider the limits for each peril before deciding on what to do.