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Is car insurance mandatory in Nigeria?

The answer to the question “Is car insurance mandatory in Nigeria?”, is not a simple “yes” or “no” answer. Rather, an appropriate answer will be — there are many types of car insurance in Nigeria, and a particular type of car insurance is what’s mandatory for all cars. Giving details, there are generally two types of car insurances in Nigeria — (i) the third-party car insurance; and (ii) the comprehensive car insurance. The third-party car insurance is a type of insurance which covers situations where your car makes damage to another person. For instance, if your car hits someone or your car destroys some else‘s car, a third-party insurance will provide you cover. As for the comprehensive insurance, as the name implies, it covers all sorts of problem that may arise with your car. For instance — (i) if you hit someone with your car; (ii) if you damage someone else’s car with your car; (iii) if your car gets burnt; (iv) if you get involved in an accident; etc, a comprehensive insurance will cover all these kinds of thing. So when it comes which insurance is mandatory, it’s the third-party insurance that’s mandatory for all owners; as for the comprehensive plan, it’s a matter of choice.

Also, if you have a comprehensive car insurance, you don’t need a third-party car insurance, since comprehensive car insurances also cover damages done to third-parties.

The average cost of car insurance in Nigeria

While the primary aim of this content is to provide an answer to your question, I know many of you will also be interested in the cost of car insurance in Nigeria; as a result of this, I’ll quickly provide some information about car insurance costs in Nigeria.

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For third-party car insurances, the average cost of getting one in 2020, is N7,500. However, if your car will be used as a transport car, expect to spend about N10,000. And as for comprehensive insurances, the cost of getting one is generally about 5-percent of the value of your car. For instance, if your car has a value of about N5 million, expect to spend about N500,000 on insurance.

Insurance validation in Nigeria

Like many other industries in Nigeria, the car insurance industry is full of fake insurances. In other words, you may think you have a valid insurance, but when it comes to claiming your insurance cover, you realize you’ve been carrying a fake insurance around all these while. So to avoid a situation where you’ll be given a fake insurance, in the disguise of a genuine one, the insurance industry has put up systems for validating car insurances.

Approach 1: Verifying with the Nigerian Insurance Industry Database (NIID)

One of the ways you can validate your car insurance, is verifying its validity with an online tool provided by the Nigerian Insurance Industry Database (NIID). The way this works is that when a genuine insurance is created, the insurance’s details are recorded in the Nigerian Insurance Industry Database. In other words, if an insurance’s details are available in the database, then this means your insurance is genuine. So what the NIID basically tool does is to check if your insurance is present in the database.

To use the validation tool on the NIID website, you’ll be asked to provide some information (mainly about your car and the insurance given to you); afterwards, the tool searches the NIID database. If the tool doesn’t return any result, this means you have a fake insurance. But even if it returns a result, you still have to go through the result, to ensure the details correspond with what was sold to you.

Approach 2: Verifying with Nigerian Inter-bank Settlement System (NIBSS)

Another way to check the validity of your insurance is to make use of a tool provided by the Nigerian Inter-bank Settlement System. Unlike the NIID tool which requires an internet connection, the NIBSS requires no internet connection.

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To verify your insurance with this tool, you just need to dial *565*11#. When you dial the code, just follow the prompts, and you’ll be able to see if your insurance is genuine or not.

You should have a genuine car insurance

While there are people who carry fake insurances around, without knowing their insurances are fake, we have some who do this intentionally. In fact, we also have some who don’t even bother getting an insurance at all. And while you may think “the money excuse (I don’t have the money.)” is a genuine excuse, I don’t think you’re doing the right thing. It’s not my prayer that you injure someone, but if you ever inflict damage on a third-party with your car, that’s the day you’ll realize third-party insurance is for your own good. There are people (I’m speaking from experience) who got over N1 million to cover the cost of damages they inflicted on a third-parties, by just paying for a “N7,500 insurance”; so you should really try as much as possible to get yourself an insurance. In fact, if you can afford a comprehensive insurance, you should really consider getting one; if you aren’t still convinced, asked from people who have enjoyed the cover of car insurances.

The best car insurance companies in Nigeria

I understand the reason why some people have chosen not to get insurance is because of the bad stories they’ve heard about insurance companies. But the truth is, while such stories are true, these stories are chiefly related to the bad insurance companies we have out there. If you make use of any of the best insurance companies in the country, I strongly doubt you’ll have such problems.

So for those who’ll like a comprehensive list of insurance companies in the country, you can check the National Insurance Commission (NAICOM) website. But as for those who just want the names of the ones I personally consider the best, the car insurance companies I consider the best are — (i) Leadway Assurance Company; (ii) AIICO Insurance; (iii) AXA Mansard Insurance; and (iv) Mutual Benefits Assurance.

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1. Leadway Assurance Company

Leadway Assurance Company is hands-down one of the best insurance companies in Nigeria. The company has been around since 1970, and ever since it came into existence, it has been in great condition. As of 2015 the company is estimated to have assets worth over N137 billion. In fact, it’s one of the insurance companies I personally use.

2. AIICO Insurance

AIICO Insurance is another of the best insurance companies we have out there. The company has been around since 1963, and from my personal experience using the company, I’ll confidently recommend it to anyone. The company has all the characteristics you’ll expect from a good insurance company. So feel free to do business with them.

3. AXA Mansard Insurance

I personally don’t use AXA Mansard Insurance. However, with the experience my family members have had with the company, I believe the company is also a company that deserves being recommended. Also, in terms of finance, the company is very strong, so there’s little or nothing to worry about.

4. Mutual Benefits Assurance

Mutual Benefits Assurance is also a great car insurance company. The first three companies I mentioned above seem to be more popular than Mutual Benefits Assurance, but Mutual Benefits Assurance is also a company I can recommend anyone. The company is well-established and has delivered excellently on all occasions I’ve experienced.

Final words

While some people may feel in this article I’m not on their side, by putting “car insurance” and “car insurance companies” in a positive light, the truth is you’re correct. However, I’m doing this with my readers at the topmost of mind. So in other words, in no way has any company paid me to write something positive about them; so this is never some sort of promotional content. Rather, this is me being blunt, even though some people may not be pleased with it at first.

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