UNDERSTANDING MOTOR INSURANCE POLICY (PT 1) – KNOW THE EXTENT OF YOUR COVER

 

textgram_1467900248Nothing could be more frustrating and humiliating than paying for something only to discover that it is useless. I would feel defrauded. The painful part is that this realization usually dawns on you at the point when you have suffered a loss and you expected that you have a right to compensation under your motor insurance policy.

From experience, a very high number of people don’t peruse their insurance policy after receiving it. May be one out of 15 people would take time out to do so. Many won’t even remember where it was kept.

Your policy document contains the terms and conditions of the contract between you and your insurance company. Your insurer knows what’s in that policy but do you? Ignorance is not an excuse.

When you pay for a motor insurance policy, what you are given is usually a general (standard) cover. There could be aspects of that policy that doesn’t suit you and you would want to change but you wouldn’t know except of course you have gone through it and also ask questions.

For example, do you know that:

  1. Flood damage to your car is not covered under a standard motor policy?
  2. Damage to your vehicle following a riot, strike action or civil commotion is excluded?
  3. Liabilities that might arise from the use of you vehicle outside Nigeria is also not covered.

And there are others but you may only get to find out when it is too late unless of course you ask questions.

What does a comprehensive motor insurance policy basically covers?

The cover is divided into three.

  • On your vehicle it covers;
  1. Accidental damage
  2. Fire damage
  3. Theft of your vehicle, damages to it following a theft or doing an attempted theft.
  • For you, it covers;
  1. Medical expenses for you following injury sustained.
  2. Loss of personal effects (subject to a limit)
  3. Injury to non-fare paying passengers (and who are also not part of your family) in your vehicle (also subject to a limit)
  • On third party(ies);

All the covers provided by a Third Party Motor Policy.

  1. Covers medical expenses incurred on an injured 3rd party (ies)
  2. Covers burial expenses for other road user(s) who died following an accident cursed by your vehicle
  3. Covers damage to 3rd party property(ies) up to a specified amount (usually N1,000,000.00)
  4. And legal fee or compensation awarded against you to a 3rd party by a law court following a loss caused by your vehicle.

How much is it?

The amount you pay as premium is a function of the monetary value you are placing on the vehicle. While you have the option of shopping around for a reduced rate, what should be paramount to you is the capacity of your would be insurer and how responsive they are when it comes to claim settlement.

Advertisements

Author: Abolaji Dairo

Abolaji Dairo is a seasoned insurance practitioner with several years of experience to his credit and an Associated member of the Chartered Insurance Institute of Nigeria. He started his insurance practice as a Client Relation Officer and Marketer where he witnessed the wide misconception about insurance by the public and the massive knowledge gap that existed. He afterwards became an Underwriter with specialty in Claims Administration and Loss Adjustment. This afforded him the opportunity to acquire adequate practical knowledge about the workings of insurance. His love for writing, insurance and knowledge sharing turned him into a blogger. He presently works with Consolidated Hallmark Insurance Plc. as a Claims Expert and he is committed to customers satisfaction by providing highly professional, timely and qualitative services.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s