National Insurance Commission Archives - Car Insurance Nigeria

Motor Vehicle Insurance: Know Before You Buy

Most of us have childhood dreams of owning a car or a bike at some point in our lives. Once we get a job, we start saving money to buy a car of our choice and then finally we are able to do this. However, there are uncertainties car travels and cruises. Your car could meet with an unforeseen negative eventuality any day, for real!

It is important to get motor vehicle insurance for cars, trucks, motorbikes and other road vehicles. Having this kind of insurance gives you financial coverage in case of physical damage.

Things to keep in mind when choosing your motor vehicle insurance policy:

Here are the types of coverage that motor vehicle insurance usually provides:

Liability Coverage
Fire and Theft Coverage
Comprehensive Coverage
Property Damage Liability
Bodily Injury Liability
Rental Car Insurance
Pay-Per-Mile Coverage
Personal Injury Protection
Under-insured Driver Coverage
Collision Coverage
Physical Damage Coverage
Uninsured Driver Coverage
Gap Insurance

Most of these coverage facilities are optional. If you add them to the policy you choose, your premium amount will likely increase.

Make an informed decision about the kind of coverage you need:

Rates of motor vehicle insurance tend to vary depending on your gender, status, health, assets and income. All in all, always choose a policy that is most suited to you and your life style. Compare motor vehicle insurance quotes online or through agents so that you do not end up making an expensive mistake by choosing a policy that is wrong for you.

Know the loopholes: A good idea is to buy a car that qualifies for a discount, or at least does not lead to additional surcharges. Before deciding to purchase a vehicle, consult your insurance agent about the cost of insuring that vehicle.

What you need to know about motor vehicle insurance policy in Nigeria:

In Nigeria the Third Party Car Insurance policy is compulsory. However, before you acquire third party auto insurance, keep in mind that it does not cover any personal damage you may have incurred in whatever situation. The claim you can make on your third party auto insurance policy is limited. Before selecting a policy, make sure you find out what how much loss the policy covers.

Another kind of motor vehicle insurance, called Comprehensive Auto Insurance Policy, exists to save you from any losses that you might incur as a result of damages caused by an accident. This is not a compulsory kind of insurance, but experts recommend it for your benefit and safety.

In order to read up on any insurance company, you could look up the National Insurance Commission, NAICOM website. There you will get up to date and reliable information about the insurance companies. You will also get information about insurance brokers and reinsurance companies.

History of Insurance in Nigeria – A Peep at Olden Times

To understand how insurance operates in Nigeria, it is important to know the history of insurance in Nigeria. The birth of modern insurance in Nigeria is closely associated with the arrival of British Trading Companies. These companies facilitated inter-regional trade in the country. These foreign companies, therefore, needed to deal with some of their risks at a local level. This changed the shape of the insurance sector in Nigeria.

These trading companies were given insurance agency licenses by their foreign authorities from abroad. The licenses allowed the firms to facilitate claims supervision and issue covers.

In 1918, Africa and East trade companies inaugurated the Royal Exchange Assurance Agency. This was the first insurance company in the history of insurance in Nigeria. Other agencies included:

BEWAC’s Legal and General Assurance
Patterson Zochonis (PZ) Liverpool
Law Union and Rock

Due to the tragic effects of the Second World War, trade and commerce suffered both in the United Kingdom and in Nigeria. The initial years of Nigerian insurance companies witnessed slow growth between the 1920s and 1940s. Once the war got over, the insurance industry in Nigeria picked up its pace and made progress that would be embedded forever in the history of insurance in Nigeria.

The first insurance company indigenous to Nigeria was the African Insurance Company Limited. This was established in 1958. On October 1, 1960, the country gained Independence from the British. At the time of Independence there were twenty five insurance companies in Nigeria. Only four of these were owned by Nigerians. In 1961 the J.C. Obande Commission report, a milestone in the history of insurance in Nigeria, was released. This led to the formation of the Nigerian Department of Insurance as part of the Federal Ministry of Trade. This department was later transferred to the Ministry of Finance. The Insurance Companies Act of 1961 made it necessary for insurance businesses to be grouped into various classes for registration. According to provisions of the Act, the office of the Registrar of Insurance was created. The purpose was to manage insurance practice in the country. Minimum capital requirement and other regulations for registration, monitoring, and control of insurance operations- these are some other provisions that fall under the other provisions of the Act.

In 1976, an Insurance Decree was released. This gave authorization to insurers, transfers, modes of operation, administrative, enforcement guidelines and penalties. By this time, the number of indigenous companies had outnumbered the foreign insurance companies.

In 1997, the National Insurance Commission was established. It was given the duty of overseeing and organizing insurance in Nigeria. This body is functioning as the main insurance regulator in Nigeria. An Insurance Special Supervisory Fund was set up in 1989, which made it compulsory for insurance companies to give in 1 percent of their gross earnings to the fund. This also strengthened the Insurance Supervisory Board.

The insurance industry in Nigeria has been steadily growing ever since.