Insurance is a vital, yet sometimes poorly understood concept. Nigeria has a low insurance penetration market compared to other countries – but why is this the case?
It is usually comes down to poor knowledge of the benefits of car insurance and how you can actually get something out of insuring your car, even when faced with limited finances.
This is a somewhat worrying concept, especially when Nigerian law stipulates it is mandatory for all drivers to have at least Third Party coverage on their vehicles.
Although the minimal coverage, Third Party insurance pays for all claims made against you when you are involved in an accident. These claims could be for bodily injuries or damage to vehicles or other equipment in your car at the time.
Since Third Party car insurance is the cheapest option to get your wheels on the road, many choose this option without a second thought of taking the car insurance search a step further.
This does not necessarily mean that you have found the best value for money, and the reality is that if you take your search just one step further, you could find a car insurance deal that suits both your lifestyle and your pocket like a glove.
Important factors that insurance companies usually take into account include age, gender, marital status, and the residential area of their policyholders.
Of course many lifestyle variables may not under your control however there are many tips to get the most out of your insurance package and still have cash left over to spoil yourself. Instead of accepting what your car insurance provider requires of you, you should be asking what your car insurance provider can do for you.
Take a look at a few ways to make car insurance work for you;
Never accept one price, COMPARE
Nothing drains the life out of you more than realising you have paid more for a service that could have been enjoyed elsewhere at a cheaper price. When shopping around for insurance, avoid making hasty decisions.
It is generally advised to compare prices amongst three or four insurance providers before committing to one. Make use of comparison websites online and even take it a step further by reaching out to friends, colleagues and families – word-of-mouth can and will always be the strongest point of reference.
Being a cautious driver can significantly reduce your insurance premiums. Why you may ask? According to many insurance providers you are considered less of a risk and are less likely to be involved in a car accident or collision. If you think of this from a business point of view for the insurer, it just makes sense.
Becoming more vigilant on the roads, watching where you park and minimising speeding fines will make a prime candidate for low insurance premiums. Depending on your insurance provider, you may even enjoy benefits for being such an upstanding and moral driver.
Car insurance providers will also take into account your driving history when deciding on your final insurance premium. Information on past car accidents and speeding fines will be taken into account. This lets the insurance company know the kind of a driver they are taking on financially.
If you have been a model driver, yet still opt for Third Party coverage, you can start to see the folly in your ways and where you could have received more coverage for possibly the same price you currently pay. This includes towing your car, rental of a car after an accident or claiming for any loss or theft of items in your car after a hijacking or robbery.
Pay a higher excess
Excess is the amount of money that you pay when you make a claim against your insurance provider. It is also called the “uninsured” portion of your vehicle. A higher excess leads to lower premiums, whilst a lower excess leads to higher premiums.
Depending on the type of driver you are, i.e. few or no accidents on the roads, paying a higher excess might be the best insurance option for you. This will lower your premiums and save you money.
Benefits, discounts, savings – claim them all
Are you aware of the benefits and discounts you are potentially eligible for if you paid more attention? You might be knocking your head against the desk when you discover just how much you could have saved.
Do you have an alarm and tracking device installed in your car? Do you park your car behind a gate at work and at home? Do you hardly drive your car at all? If you have said yes to even one of these questions, you are eligible for a discount on your car insurance. Feel silly? It’s okay, you’re not the only one out there.
Do your research on your current insurance providers’ benefits and if they include none of what has been mentioned so far, consider revising and taking your business elsewhere.
Think it is only about the type of driver you are? Think again
Your credit score and history will be taken for a spin too. Insurance companies assess the risk of taking you on in order to anticipate future claims on your part. A good credit score will put you in good stead and insure your premiums stay low. A bad credit score will inevitably follow high premiums.
Make a habit of checking your credit score regularly and pay all monthly payments timeously and without delay. Late or non-payment is the number one reason for a bad credit score.
Saving on your car insurance can be as simple as asking your insurance provider where you can save. Word-of-mouth from a friend about their insurance provider can be your strongest ally when deciding if you should take your business elsewhere. All you need do is ASK!