Should I Cancel My Insurance Since I work from Home Now Due to Covid-19?

Dear Insurance Info,

In January I insured my car for about N120,000.00 a year. So far I have not made any accident claim. Due to the lock down here in Lagos, my company now makes us work from home. For about a month now, I have not been driving except when I want to go to the market to buy food. Now, I feel like the insurance money is wasting so I should cancel my insurance. My questions is whether you think it is a good idea to cancel the insurance. And whether the insurance company will refund my money if I cancel. Well done on your informational site. It has taught me a lot.

Regards,

Tami

Dear Tami,

Let me first start by thanking you for the compliments on our informational site. It is my intention to bring insurance awareness to Nigerians so that they can protect themselves and their loved ones.

Covid-19 is an unfortunate situation causing a lot of havoc in the world not just Nigeria. We are all uncertain about what will happen at the end of the pandemic. A lot of economies like the US, where 10 million jobs have been lost, have started crumbling due to the pandemic. In Nigeria, some companies are already sending out emails to their staff informing them they may be unable to pay salaries this month. Although we have no stats on how many have lost their jobs due to this pandemic.

Let me commend you for taking the responsible act of protecting your vehicle by insuring it. At least you are not one of those people that make the mistake of buying car tracker instead of car insurance. They believe that it is a cheaper alternative but it is not. Rather than digress, I will point you to read why car insurance is better than car tracker.

Permit me to answer the second question first. The N120,000 you paid up front is for a year. If you decide to cancel at the end of April, you would have used 4 months out of 12 months. The amount paid would be prorated and you would be refunded N80,000.00. So yes, you can cancel and get some of your money back.

With that out of the way, the question now is should you cancel? However tempting it may be, I do not thing it is a good idea to cancel. Right now we are hearing about 1 million boys terrorizing and robbing people. Last week, I posted about a man that was robbed at home and his highlander was taken. People are getting desperate, and if this lock down continues, you can’t predict how people will react.

Look at your car and ask yourself, how many parts on that vehicle can N80,000.00 replace? Should your car be stolen or damaged beyond repair, do you easily have another N3 million to buy another car? If yes, then by all means go ahead and cancel your insurance. But with the financial uncertainty that comes after Covid-19, I would advise you not to cancel your insurance just in case something goes wrong. I hope you make the right decision.

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