Uninsured and Under insured insurance coverage

Do you know what uninsured and under insured insurance coverage is? In previous articles, we discussed third party liability insurance and comprehensive car insurance.

Today I want to cover uninsured and under insured insurance coverage which is another less known insurance option in Nigeria. I found out about it when I inquired about it with my insurance agent back in the US.

As a student, I couldn’t afford comprehensive insurance and by law you had to have liability insurance. Although some people still didn’t have insurance because they couldn’t afford it.

A drunk driver hit me from behind smashing my bumper. The force of the hit pushed me to hit the car in front of me. It turned out that the drunk driver didn’t have car insurance. The cops arrested the driver for drunk driving and driving without insurance.

The insurance company of the person I hit came after my insurance company since the other person didn’t have car insurance.

My insurance company paid to cover the cost of the repairs for the person that I hit but not mine. As a student, I couldn’t afford to fix it, so I drove it like that for six months!

My agent offered me the uninsured/under insured insurance coverage after the accident. If you hit someone’s car, the insurance company will cover their car but not yours. However, if someone hits your car and they don’t have insurance, your insurance company would cover your car.

Remember that liability insurance typically won’t cover you if someone hits you and they don’t have insurance. In the US, the person goes to jail but you are left to fix your car by yourself. In Nigeria, nothing happens, they beg you and you go and use the abeg to fix your car.

Uninsured/under insured also covers you in the event the person that hits you doesn’t have sufficient coverage to cover your loss. For instance, most liability insurance will cover you up to N1,000,000.00. If the damage is a total loss and your car is worth N2,000,000 then the liability insurance of the at fault driver would pay N1,000,0000 and your insurance would pay N1,000,000.

With regular third party insurance, you will only receive N1,000,000 from the other party’s insurance. You would have to use your own money to make up the difference to buy another car.

I have been doing research on this type of insurance in Nigeria and the closest I have seen is the Leadway Autobase insurance. “Autobase is one of specially designed auto insurance products that gives you a motor third party cover and compensation for damage to your vehicle up to a limit of N250,000.”

What this means is that if you hit someone’s car the insurance company will cover the cost of repair to the person’s car, up to N1,000,000.00 and they will also cover the cost to repair your car up to N250,000.00. The insurance costs N10,000, N5,000 more than the cost for liability insurance. But it give you some taste of comprehensive insurance. This is what the Americans call a win win.

Disclaimer: I have never used Leadway insurance, nor do I know anyone that has used this insurance. This is not an endorsement of the insurance company. It is for informational purposes only. There are other factors to consider before choosing an insurance company. One of which is how easy it is to make a claim when involved in an accident. Please do your research before you join any insurance company.

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