Table of Contents Hide
- Types Of Insurance Policies In Nigeria
- Types Of Insurance For Vehicles
- The Advantages of Having an Insurance Policy in Nigeria
- What are the 7 Principles Of Insurance?
- What Is Double Insurance?
- What is the Difference Between Assurance And Insurance?
- What Are The Functions Of Insurance?
- What Is The Definition Of Reinsurance?
- What is the Difference Between General Insurance And Life Insurance?
- What Is Unexpired Risk?
- Who is Assured In Insurance?
- In Conclusion
We can’t always avoid the unexpected, but we can occasionally protect ourselves and our family from the worst of the financial consequences. The correct type and amount of insurance depends on your individual circumstances, such as children, age, lifestyle, and employment advantages. Here, we’ll look at the various types of insurance policies available in Nigeria.
Types Of Insurance Policies In Nigeria
#1. Health Insurance
Arguably one of the most popular types of insurance in Nigeria, a health insurance policy can cover basic patient screening tests, medical consultations, free preventive healthcare, and treatment for certain ailments. More premium options have access to additional perks such as gym memberships, telemedicine, spa treatments, and many more.
#2. Automobile Insurance
If you wish to operate any vehicle on Nigerian roads, you must have car insurance. Auto insurance provides vital security for automobile owners, and there are several car insurance products available in Nigeria. Third-party auto insurance coverage is required by law for all car owners. This coverage protects other road users for collision and non-collision damages, theft, fire, or loss, but not the insured or their possessions.
#3. Life Insurance
In Nigeria, there are various kinds and terms for a life insurance policy. In the event of the insured’s death, the policy provider pays the insured’s benefits to the insured’s family or loved one(s). This form of insurance is projected to last 10, 15, 20, or 30 years.
#4. Home Insurance
In Nigeria, a home insurance coverage has a fixed period of 20 or 10 years. It protects your property from damage or destruction caused by fire, accident, or natural catastrophes such as flooding. The cost for this policy is frequently determined by whether you want full or partial coverage, as well as other factors.
In Nigeria, a homeowner insurance policy covers all moveable items on the policyholder’s property. In the event of loss or damage, digital or electrical devices such as your television, laptops, refrigerators, game consoles, and many others can be protected. Property owners or tenants can purchase this kind of insurance. Householder Insurance is a term used by several insurance providers in Nigeria.
#5. Travel Insurance
Travel insurance in Nigeria provides insurance coverage for the insured during a trip. This sort of insurance provides coverage for medical emergencies and accidents. Travel insurance is available for trips both within and outside of Nigeria, but most insurers focus on overseas travel.
#6. Device Insurance
Also known as phone insurance, device insurance in Nigeria protects the insured gadget(s) against loss, screen, or liquid damage for a fee. The coverage can be full or partial reimbursement for the cost of repairing or replacing such equipment. However, it reduces the annoyance of paying for broken or lost items, which are often unexpected by the owner.
#7. Events Insurance
An event insurance coverage would protect attendees from accidental injuries, equipment loss or damage, and other liability claims.
This is not an exhaustive list of insurance policies available in Nigeria; we have focused on insurance plans for individuals rather than business insurance policies in Nigeria. Marine Insurance, Aviation Insurance, Engineering Insurance, Oil and Gas Insurance, Manufacturing Insurance, General Business Insurance, and other policies are examples of such policies.
Types Of Insurance For Vehicles
Car insurance will not keep you from getting into an accident, but it will assist you cover the medical fees and repair costs that arise as a result of it. The types of auto insurance coverage you choose and the limitations you choose will determine the amount your policy will pay.
Here’s a rundown of the most common types of vehicle insurance, what they cover, and when you might need them:
#1. Liability Insurance
If you cause a car accident, your liability insurance pays for the other driver’s medical bills, property damage, and possibly death. Almost every state requires this coverage for all drivers, and proof of insurance is required to lawfully drive a new vehicle.
There are two kinds of liability insurance:
- Bodily injury liability: covers the medical expenses from an accident.
- Property damage liability: covers the repair costs to other vehicles, fences, mailboxes or buildings from an accident.
#2. Personal injury protection and medical payments insurance
Personal injury protection (PIP) and medical payments coverage (MedPay) cover your medical bills following an automobile collision, regardless of who was at fault. If you were the negligent driver, they will also cover medical expenditures for wounded passengers.
Personal injury protection, commonly known as no-fault insurance, may cover funeral expenses, child care, and lost income as a result of an accident. In 17 no-fault states, PIP or MedPay is mandated by law.
#3. Coverage for uninsured and underinsured motorists
When an uninsured driver hits you, uninsured motorist coverage pays for the damages. This may be more essential than you think, because according to a 2021 Insurance Research Council report, one in every eight drivers did not have auto insurance in 2019.
Underinsured motorist coverage, on the other hand, pays when the at-fault driver’s insurance limits are insufficient to cover all of the injuries or property damage incurred.
Some states mandate a certain level of uninsured or underinsured motorist coverage. Here are four sorts of coverage that may be required:
- Uninsured motorist bodily injury coverage, or UMBI, reimburses medical expenses incurred as a result of an uninsured driver.
- Uninsured motorist property damage coverage, or UMPD, compensates for repair costs incurred as a result of an uninsured driver.
- Underinsured motorist bodily injury coverage, or UIMBI, pays out if the cost of injuries and repairs exceeds the bodily injury liability limitations of the at-fault driver.
- Underinsured motorist property damage coverage, or UIMPD, compensates for repair costs that exceed the at-fault driver’s liability limits for property damage.
#4. Collision and comprehensive insurance
Collision and comprehensive insurance are not required in every state, although they may be required under certain circumstances, such as if you financed or leased your vehicle. The limit on these kinds of coverage is the worth of your car at the time of the accident, and those limitations pay to repair or replace your car if it is stolen or damaged beyond repair.
Collision insurance covers damage to your car in the event of an accident, regardless of who is at blame. Additionally, it will pay for any harm a pothole or other object, such as a tree or pole, causes to your car.
Comprehensive insurance compensates you if your vehicle is stolen or damaged in ways other than a car accident. Storms, floods, falling objects, explosions, earthquakes, vandalism, or hitting an animal (deer, raccoon, armadillo, etc.) are all examples of damage.
Comprehensive and collision coverage typically have a deductible, which is an amount you must pay before your insurance will pay anything. If you choose a greater deductible, your premium will be lower. However, because the reimbursement is limited by the value of your automobile, comprehensive and collision insurance may not make sense for older cars with low cash worth, especially if you have a high deductible.
#5. Gap Insurance
In most circumstances, the value of a new car will depreciate faster than the loan sum at first. If you total a new automobile that hasn’t yet been paid off, gap insurance will pay the difference between the car’s value and the amount you still owe on your loan.
In addition, if you lease a car, the leasing company will need you to have gap insurance.
The Advantages of Having an Insurance Policy in Nigeria
#1. It protects you from financial loss
An insurance policy safeguards your finances against unforeseen dangers that could result in financial loss. The average amount of insurance premiums paid to the insurance provider over time will lessen the financial impact of disease, fatalities, loss, and accidents.
#2. Enhances Cashflow Management
The coverage provided by your insurance policy improves your ability to manage your financial flow. Even if the policy does not give complete coverage for an unforeseen event, it provides a valuable financial buffer.
#3. Government Policy
In some cases, such as auto insurance, government rules and regulations in Nigeria make it mandatory for you to be a policyholder, and as a law-abiding citizen, doing so is the correct thing to do and in your best interest.
Some insurance policies give you the unique ability to borrow money from your policy provider. When in severe need of money, such an opportunity can be extremely beneficial.
#5. Aids in Developing a Savings Culture
Being an insurance policyholder can assist you in developing a savings culture. In the event of a loss, illness, or an unforeseen life tragedy, you are more likely to be able to continue caving than someone who does not have insurance coverage.
What are the 7 Principles Of Insurance?
Insurable interest, utmost good faith, proximate cause, indemnification, subrogation, contribution, and loss of minimizing are the seven main principles that should be followed in insurance.
What Is Double Insurance?
The method of obtaining insurance on the same subject matter with more than one insurer or with the same insurer under various policies is referred to as double insurance. This indicates that a subject can be insured for more than its monetary value. In all forms of insurance contracts, double insurance is an option.
What is the Difference Between Assurance And Insurance?
Most people identify insurance with general insurance, such as automotive and motorbike insurance, which covers accidents and vehicle damage. In contrast, assurance is linked to life insurance plans, which cover the death benefit of the insured.
What Are The Functions Of Insurance?
The primary function of insurance is to eliminate the uncertainty of a sudden and unexpected financial loss. This is one of a company’s main concerns. It replaces this uncertainty with the certainty of regular payment, i.e. the premium to be paid.
What Is The Definition Of Reinsurance?
Reinsurance is defined as a compensation strategy that protects insurers from extremely large claims. It usually entails a third party paying a portion of an insurance company’s claims after they cross a specified threshold. Reinsurance is a method of stabilizing an insurance market and increasing the availability and affordability of coverage.
What is the Difference Between General Insurance And Life Insurance?
Life insurance protects an individual’s life and fixed health benefits such as serious illnesses such as cancer and heart disease. General insurance provides coverage for non-life assets such as homes, cars, health, events, travel, and so forth. If the insured dies during the duration of the policy, the nominees receive the sum assured.
What Is Unexpired Risk?
The present value of loss and expense payments to be provided for by premiums covering the period from the valuation date to expiry on all contracts in force on the valuation date is known as the unexpired risk reserve. A loss reserve is a provision for an insurer’s claim responsibility.
Who is Assured In Insurance?
The term “assured” refers to a person who is insured against any loss or harm specified in an insurance policy acquired from an insurance company or an underwriter.
Living without insurance exposes you to significant danger and ongoing financial loss when tragedy strikes. Nobody wakes up and declares that they will become ill or suffer a loss today. In many circumstances, most Nigerians consider insurance to be payment for what will not happen rather than payment for what will happen. Speak with an insurance broker right now to protect yourself and your family. Who knows? It could be the beginning of your freedom from financial loss; get covered today.
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