Growing up, as the economy got bad, insurance companies avoided paying claims for every reason possible. Gradually, we moved from comprehensive vehicle cover to third-party cover. Comprehensive takes care of everything while third-party takes care of only the affected party’s damages. Third-party is much cheaper than comprehensive but it equally fulfils the legal requirement. Everyone was fine living with that.
Then one day a friend’s car was stolen!
He just packed outside a friend’s house to drop something and got outside and the car was gone! I learnt that when cars get missing people tend to look everywhere: behind the hedge of flowers, in the drainage, under the culvert, etc. The car was gone and the Police searched everywhere to no avail. We found that insurance companies had matured and would’ve paid if he had comprehensive vehicle insurance.
As a result. I always obtain comprehensive vehicle insurance. I found that there’s insurance for almost everything. There’s insurance for the house, there’s insurance for the contents of the house. There’s insurance for phones, for business risks, for CEOs (called keyman risk). There’s also life assurance.
The main problem with insurance is that you have to always get it before you need it. Once there’s a need, it’s already too late to buy insurance. My car was once involved in a road traffic accident. The insurance company took over the car and paid me for it, to the value of my insurance cover.
But what if you keep paying the premium and you never make a claim?
Well, at least, you enjoy the peace of mind; and it is worth it. If your car is worth five million Naira and you keep it for 10 years. If you pay a premium of 5% of the value per annum, you pay N25,000 per year. In the 10 years, you would’ve paid a premium of N250,000. Compare that with losing the vehicle and its value of 5 million in one fell swoop.
So, do you like insurance?