As long as insurance has been in existence, it has really not set-in into the minds and planning of most Nigerians. As we are yet to see the benefit of getting our lives and properties insured. No one prays for any mishap but once in a while they do occur, and at times when no one anticipates. Insurance is necessary for every individual as it stands as a risk management policy to hedge against the risk of a contingent or uncertain loss. Insurance carriers find it harder to sell insurance to the masses because they have not been able to communicate properly, who needs insurance, what kind of insurance is needed and why?
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer’s promise to compensate (indemnity) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. Now this is why people say insurance is complicated and confusing. In lay man term, a man pays a certain sum of money (usually small) to insure his car, so that if the car is involved in an accident, the insurance company will carter for the total cost of the repair. This article handles some basic things about insurance and its under rated policy.
1. The Kind of Insurance Most People Need
There are over eight types of insurance which includes, Health, Premium, Automobile, Life, Claims, Profit, and Security insurance. But basically, what most people are concerned about insuring are their possessions, their life, their health and their finances.
2. Importance Of Insuring Your Home
A house is most likely the single biggest investment most Nigerians make, so it is most important that it is insured, even if you don’t get to insure any other thing that concerns you. If you can, pay a bit extra to obtain guaranteed replacement coverage, which mandates that the insurer will replace your home if it’s destroyed regardless of how much it costs. If you only specify a certain amount of coverage, you could end up paying the difference if it doesn’t meet all your replacement expenses.
3. The Extent Of Your Insurance
Sometimes we are disappointed to realized that an insurance doesn’t covers 100% guaranteed replacement. Most doesn’t and that is why you should inquire before purchasing to know what your homeowner’s insurance covers and what it doesn’t. For example, particularly pricey items such as big-screen televisions and extra fancy stereo equipment are often excluded from policies or, at the least, inadequately covered. The same goes for antiques, collectibles, expensive jewelry and furs. It is also important to note that most home insurance do not apply if the home is destroyed by flood. What do you do in such instance?
6. Car Insurance An Absolute
In other countries, every state requires that drivers have some sort of automobile insurance in place, but in Nigeria it is not so. However, individuals need to get this whether they are chased about or not by the government to get that done, because it will be sheer madness to drive even one inch without some form of protection with the way Nigerian drivers throttle on the road.
7. Holding Down Auto Insurance Cost
Insurance for cars may or may not come with liability protection, which is effectively divided into bodily injury protection and property protection. So to be sure you don’t spend so much on that, get the one that covers just the car, then your liability insurance, that’s if you have, will cover any body harm gotten from the accident. It will be better doing it this way then paying all the way for full liability insurance for your car. Other ways to cut cost is to drive safely and insure every car you own with the same company (multi-car packages often mean lesser premiums).
8. Life Insurance
If you have people depending on you financially, then having a life insurance is essential to cover the upkeep of your loved ones when you are gone. This will save your parents, spouse and children the stress of begging or struggling for survival.
9. The Amount of Insurance You Need
It’s not always easy figuring out how much life insurance you need. It’s something of an inexact science, but try MSN Money’s Life Insurance Needs Estimator.
10. The Kind Of Life Insurance To Consider
For the most part, term life insurance works the best for most people. It’s the cheapest and most simple insurance you can get. You pay the premium and you’re insured. It’s particularly effective if you follow the time-honored wisdom of buying term and investing the difference, which is what you would have to pay to get some sort of cash value insurance, or “whole life.”
11. Health Insurance
This insurance is very important and only few rich Nigerians are beginning to subscribe to it. Big companies also offer health insurance to employees, usually at fairly reasonable group rates. Most plans boil down to a choice of two options, known as managed care and fee-for-service. If you’re self-employed or, by chance, your employer doesn’t offer health coverage, make certain you get something in place.
12. Reliable Insurance Companies In Nigeria
With the increasing level of understanding of most Nigerian, several new Insurance companies are beginning to spring up every day. However, only a few are reliable and worthy of investing with.
Check them out here: 34 Best Insurance Companies In Nigeria