Car insurance comes in different types depending on the scale of protection provided. In Nigerian, it is legally required that car owners should first get car insurance before hitting the roads with their cars. Also, worthy of note is the fact that 3rd party insurance is the cheapest insurance cover that car owners can get to insure their cars.
It is also important to bear in mind that at times, third party car insurance can be the only option that car owners can access. Before you choose this type of car insurance, it is best to have some background information so as to make an informed decision.
Table Of Content
In the course of this post, we shall attempt to cover the following areas;
Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or her property, or from liability for damage or injury caused to a third party.
Okay, having outlined that, without wasting much of our time, we shall proceed with the list of points we wish to address in this post. We shall be taking them one after the other to ease understanding.
1. 3rd Party Insurance – What is it all about?
Third party car insurance is among the different types of mandatory insurance which every car owner is expected to get his or her car insured with. It’s interesting to know that this mandatory form of insurance till date remains the most enforced out of all the compulsory insurances.
Third party car or motor insurance provides protection/cover for any damage, injury or even death resulting caused by the car on third parties.
First and second party in third party car insurance
Who is the first and the second party in 3rd party car insurance? In the third party car insurance, the car owner taking the 3rd party car insurance is known to as the first party. The insurance company, on the other hand, is known to as the second party whereas the third party is the protected party under this cover.
2. When is it Best to take up 3rd Party Insurance?
A lot of car owners don’t seems to know when is the best to take up 3rd party car insurance. Here, it is recommended that car owners are best suited to taking up 3rd party insurance when their vehicle’s value is negligent. The car owner can be able to cover the cost of repairing their own car but since the damage to third parties is not predictable, it is best to have the help of an insurance company to cover it effortlessly. In some cases, insurance companies are only willing to issue 3rd party insurance on cars that satisfy some set requirements.
This is the case for very old cars whose repair can be quite expensive due to the unavailability of spare parts. However, car owners whose vehicles are relatively new and in great condition should desist from taking third party car insurance as it is not suitable. 3rd party insurance does not cover theft or total destruction of a car.
As such, the occurrence of these events would leave the owner without any solution to turn to. There are other policies that provide more cover for car owners as compared to the limited cover offered by third party insurance.
3. 3rd Party Insurance in Nigeria
What is third party car insurance in Nigeria? Just like other countries of the world, having car insurance in Nigeria is considered to be very important, especially from a legal perspective. Every Nigerian who owns a car purchase car insurance just to avoid being legally liable for not having them insured. However, in Nigeria, most car owners because the cost is a major consideration, rather than a comprehensive insurance policy, many resorts into having third party insurance as an alternative.
Third party car insurance provides car owners as well as drivers with peace of mind without having to spend a lot.
So, what is then third part insurance in Nigeria?
Third party insurance is the minimum amount of protection that can be purchased and will provide coverage against physical damages that is incurred to another vehicle or property, injuries to your own passengers or the passengers of the third party, and for medical and legal cost for claims that are filed against you.
However, if in case your own vehicle is damaged or if you have been injured and you are the one to be blamed, it is important to note that such is not covered by third party insurance in Nigeria. In the same way, if your vehicle has been stolen or if it has been vandalized, you will not also be covered with this type of insurance.
Third Party Insurance in Nigeria – Are there limitations?
Third party insurance is known to be the cheapest form of insurance in Nigeria. In the article, we’ve stated earlier that because of cost consideration, rather than purchasing comprehensive insurance policy, a lot of persons, car owners resorts to this form of insurance policy.
But, the point is, are there no limitations with regard to this form of insurance policy? Or does this 3rd party form of insurance policy cover persons insured completely. Continue reading for the answers.
Here, in respond to the above, we can boldly say that third party insurance has some form of limitations which everyone who wish to purchase it is expected to take note. Here, we shall be considering some of them. According to carinsure.com, one of the first things that should be emphasized about this type of insurance would be the limitations in terms of coverage.
It further stated that, in view of the fact that this form of insurance is an affordable one, expect the coverage to be limited compared to what you can anticipate from a comprehensive insurance. With a third party insurance in Nigeria, the insurer will not provide any amount that is more than your limit to the loss. If the amount of the damage is more than your limit, you will be personally liable in paying whatever is the excess.
In Nigeria and beyond, car insurance companies are experts in their own field. Due to this expertise, they find it easy to determine if a person is just trying to rip them off or make false claims. Always be truthful with your claims to avoid any inconveniences. If they can prove that you are not acting in good faith, your insurance can be cancelled, and worse, you will be reported to the police.
At the end of the day, it is important to make the right choice when looking for third party insurance in Nigeria. Make sure that the insurer has built a positive reputation and has gathered positive feedback in the past. See to it that the insurer is also licensed to operate to avoid trouble when filing claims.
Third Party Motor Insurance in Nigeria has its legal backing in Section 68 of the Insurance Act of 2003. The Act states that: “No person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability which he may thereby incur in respect of damage to the property of third parties is insured with an insurer.”
Under this Act, the penalty for non-compliance of any motorist or driver is N250,000 or one-year imprisonment or both. Note that compliance with this act is total i.e. after purchase it must be renewed at expiry every year. An expired/unrenewed insurance is like no insurance.