Imagine you're driving, and another driver suddenly runs a red light and crashes into you. A scary thought, right? This situation could become extremely stressful especially if you're worried about paying the damages from your own pocket. That's where motor insurance can help you.

Motor insurance helps protect you and your vehicle in case of an accident or other unfortunate incident. It's like having a safety net to catch you if something goes wrong.

When you buy a motor insurance policy, you pay the insurance company a premium (a regular payment). In exchange, the insurance company agrees to cover certain costs if an accident or other covered event occurs. So if you get into an accident, you can file a claim with your insurance company, and they'll help pay for the damages or injuries that result from the accident.

For starters, you'll be breaking the law. In Nigeria, if you own and drive a vehicle, it is required by law to have motor insurance. If the officials catch you driving without motor insurance, you may have to pay a fine or go to jail for a year, or both.

Secondly, not having motor insurance would be a substantial financial risk. You may be a fabulous driver, but are you ready to risk your life and savings based on the assumption that others are as good?

If you get involved in an accident and do not have motor insurance, you may be held financially responsible for any damages or injuries resulting from the accident. You will also have to pay for the third party's medical bills and motor repairs. It can force you to dip into your savings and financially put you and your family in a tight spot.

And you are not just at risk of getting into an accident, but there are several other mishaps from which you need protection. There are other risks involved here: theft, riots, strikes, civil commotion, and fire. So, a Motor Insurance policy is like a financial cushion that supports you when you need it the most.

To speed up the process and avoid any hassle, It is a good idea to have these documents on hand when you are ready to purchase motor insurance:

• Identity proof/ address proof such as PAN card, ration card, passport, or other that has your picture in it.
• Driver’s License to prove your eligibility to drive a vehicle
• Vehicle registration proof
• Motor proposal form
• Vehicle logbook

There are two types of motor insurance that you can buy: third-party motor insurance and comprehensive motor insurance.

Third-party Motor Insurance is a compulsory vehicle insurance that only covers damages or injuries caused to other people (third-party) or their property. It does not cover the damage costs of your vehicle or medical bills in case you get injured.

Comprehensive Motor Insurance, on the other hand, is more inclusive regarding offering protection. You can also claim for your car's repair costs, medical bills, and other expenses, along with third-party coverage. In addition, it typically provides a broader range of coverage than third-party insurance, including protection against fire, theft, and natural disasters.

Comprehensive Motor Insurance plans allow you to order protection, like food, out of a menu. The add-ons differ with insurers, and you can make the best of the many alternatives.

You can customize your insurance policy according to your requirements, which may increase your premium. But in exchange, you get extra coverage, helping you secure your finances. Here are some of the common add-ons:

• SRCC: SRCC stands for 'Strike, riots, civil commotion.' When you opt for the SRCC add-on, the insurers pay for car damages resulting from strikes, riots, or civil commotion.
• Zero depreciation: Cover the cost of repairing or replacing damaged parts of your car without considering the depreciation value with this add-on.
• Engine protection: This add-on covers damages to the engine of your car caused by water or oil leakage.
• Personal accident: For financial protection in case of accidental injury or death to the policyholder while driving the insured vehicle, you must include this add-on.
• Roadside assistance: You get easy assistance in case of a breakdown or accident, such as towing services and tire repair.
• No-claim bonus protection: You can retain your no-claim bonus even if you claim during the policy period.
• Medical expenses: This add-on covers medical costs incurred by the policyholder and other occupants of the insured vehicle due to an accident.
• Key replacement: With this add-on, you can claim the cost of replacing lost or damaged car keys.
• Passengers' accident cover: Provides personal accident cover for passengers of the insured vehicle in case of an accident.
  

The best part about a comprehensive motor plan is that you can tailor-make your own motor insurance policy with these add-ons. These paid add-ons vary with insurers, and you may have to consider your insurer accordingly.

Choosing the right Motor Insurance is mostly about what you want. And to know what you want, you must know what is there to consider for maximum benefit. So here are some of the aspects that you should have clarity about before you choose the Motor Insurance plan:

• Coverage: Make sure that the policy provides the coverage you need. It includes liability coverage to protect you if you are at fault in an accident and for damages to your vehicle.
  
• Excess Buyback: Consider the excess amount and whether it fits your budget well. A higher excess can mean lower premiums, but you will have to pay more out of pocket if you need to file a claim.
  
• Premiums: Compare premiums from different insurance companies to ensure you get a good deal. With Ombrella, you can review and compare ten insurance companies without the hassle of talking to 10 other agents.
  
• Reputation: Look for an insurance company with a good reputation for paying out claims and providing excellent customer service.
  
• Add-ons: Consider adding additional coverage, such as collision coverage or roadside assistance, depending on your needs.
  
• Exclusions: Understand what is not covered by the policy. It will help you avoid surprises when you file a claim.

To understand what Excess Buyback is, let’s first crack the word ‘Excess.’ What do insurers mean when they use ‘Excess?’

When you claim on your Motor Insurance policy, there is a certain amount that you agree to pay. Excess is this pre-decided % of the claim.

Now, what is Excess Buyback?

Excess buyback, also known as an excess waiver, is an optional add-on to a motor insurance policy. When you opt for this add-on, the insurer waives your liability to pay the excess amount in the event of a claim.

For example, if the excess on your policy is N1000 and the total cost of a claim is N3000, you'll have to pay the first N1000, and the insurer will pay the remaining N2,000. But if you opt for Excess Buyback, the insurer will have to pay the entire N3,000.

Excess buyback can be a valuable add-on for you if you're concerned about the financial burden of paying the excess in the event of a claim. For example, if you're already paying other loans or in debt, own an expensive vehicle, or your livelihood depends on the vehicle, Excess Buyback is a good add-on.

When you do not make any claims during the 1-year of your motor insurance policy, your insurance company offers you a discount on your premiums from next year onwards. That’s a ‘no-claim bonus’ or NCB.

It is a reward given by your insurance company for driving safely and not raising any claims.

The NCB rate varies depending on your insurance company. But first, let’s see how it works.

If you have an NCB of 25% and your premium is 10,000 Naira, you would get a 25% discount. That is a 2500 Naira discount on your premium of 10,000. You will now have to pay a premium of 7,500 Naira.

The NCB increases each year that you do not make a claim, and the premium amount decreases with each year of claim-free driving.

For example, after one year of no claims, you might receive a 10% NCB. After two years of making no claim, it might increase to 20%, and so on.

Yes, you can easily transfer your no-claim bonus when you change the insurer. The NCB value is attached to the policyholder, making it easy for you to transfer when you switch insurance companies.

There are a few steps you’ll have to follow:

• Contact your old insurance company and submit an NCB request with all the required documents.
  
• Your insurer will issue the NCB certificate.
  
• Submit the NCB certificate to your new insurance company.
  

The process becomes straightforward if you transfer the NCB online using the Ombrella app.

All you have to do is inform your new insurer about the NCB, the name of the old insurance company, and the previous policy number. The new insurance company will automatically transfer your No Claim Bonus.

All things go through natural wear and tear with time and usage. So does your vehicle. The value of a new car will always be more than its value two years later.

Depreciation is the reduction in the value of your car because of factors like age, wear and tear, and mileage.

But what role does depreciation play in motor insurance?

When you file a claim for vehicle damage, the insurance company will typically pay for the repairs minus any deductible cost.

However, the amount your insurance company pays will reduce due to depreciation.

The depreciation value depends on the age of the vehicle. For example, if your car is more than one year old, the insurer might apply a depreciation rate of 10%. If it's over two years old, they might apply the rate of 15%.

The depreciation rate depends on your vehicle's age, condition, and the damage.

Pro Tip: Some insurance companies offer a 'No depreciation' add-on cover. It will ensure that your car's depreciation value is not taken into account when you file a claim.

Insurance premiums are never pre-decided like other products. It varies with several factors. Here are some of the aspects that contribute to fixing your premium value:

• Make and model of the vehicle: The type of car you drive can impact the premium, as luxury and sports cars are more expensive to insure than others.
• Age of the vehicle: Older cars may be cheaper to insure because they are less valuable and less likely to be involved in an accident.
• Driving history: A driver with a safe driving record may be eligible for lower premiums.
• Location: Insurance premiums can vary based on where you live, as some areas may have a higher rate of accidents or theft.
• Coverage: The amount of coverage you choose can affect the premium. More coverage typically means a higher premium.
• Deductible: The deductible is the amount you agree to pay out of pocket before the insurance company covers the rest of the costs. A higher deductible can lower the premium, but you will have to pay more out of pocket if you need to file a claim.

Generally, the motor insurance policy will cover your vehicle for a year. If your vehicle is damaged, the insurance company will pay for the repairs.

You can easily renew your policy when the current one expires.

The insurance company can issue your policy for shorter or longer periods, depending on their plans and guidelines.

Pro Tip: Keep track of your policy status and renew before it expires. Once your policy expires, your insurer will schedule an inspection before renewing it.

Also, if your policy has expired, avoid driving the vehicle. In case of an accident or theft, your insurance company is not responsible for covering the damages.

If you meet with an accident and your car is insured, take the following steps:

• Check for injuries: Check if you or any of the fellow passengers need medical attention. Even if the injuries seem minor, ensure that you seek help.
  
• Call the police: It is always a good idea to call the police, even if the accident is minor. They can make a report of the incident, which will help you with the claims process.
  
• Collect information: Get the contact and insurance information from the other drivers involved in the accident. Also, note the make and model of the other vehicles and the license plate numbers.
  
• Take photos: Take photos of the accident scene, including the damages to your car or other vehicles included.
  
• Report the accident to your insurance company: Get in touch with your insurer as soon as possible to inform them about the accident and start the claims process.
  
• Follow your insurance company's instructions: Your insurance company will provide instructions on what to do next, including getting estimates for repairs and arranging for a rental car if needed.
  
• Keep track of your expenses: Keep track of medical expenses, or any other expenses like car rentals, and lost wages. You will have to submit these to claim the reimbursement.
  

Filing a motor insurance claim can initially seem intimidating, but it's a straightforward process. Here's how to do it:

• Have your documents in place: First, gather all of the necessary documents and information. You might have to submit the police report (if required), the other driver's insurance information, your insurance policy, and any documentation of damages or injuries.
  
• Start the claims process: Next, contact your insurance company to report the accident and start the claims process as soon as possible. With Ombrella, you can easily do this online.
  
• Provide the insurance company with the necessary details: Follow the insurance company's instructions for submitting your claim. You will have to fill out a claim form, provide proof of damages, and obtain estimates for repairs.
  

Pro Tip: Ensure that you fill out the claim application form correctly. In case of errors, the insurance company can reject your claim.

• Check if your insurer covers the cost of a rental car: If you need to, arrange for temporary transportation. Some insurance policies may cover the cost of a rental car.
  
• Case review process: Once you have submitted your claim and all the necessary documentation, the insurance company will review your case and determine the amount of coverage.
  
• Approval of your claim: If your insurance company approves your claim, they will pay for the repairs directly or issue you a cheque for the covered amount.
  

Yes, you can transfer your motor insurance if you sell your vehicle. In fact, it becomes your responsibility as the car owner to transfer the insurance to the new owner.

The insurance company will charge you a transfer fee, and you must submit the required documents.

• An application of transfer of ownership
  

Note: The insurance company will not begin the policy transfer process until you’ve transferred ownership of the vehicle.

• Original registration certificate of the new owner
  
• Old insurance policy documents and certificate
  
• A new insurance application form
  
  

The requirements might change depending on the insurance company. Ombrella helps you with detailed information and makes the transfer process smooth.

During the transfer process, only the third-party cover remains active. In the case of a comprehensive motor insurance plan, the insurance company will transfer the complete insurance coverage only after the transfer process is complete.

It is important to note that while you can transfer the motor insurance policy, you cannot transfer the No Claim Bonus.

If you lose your motor insurance policy, you can get a copy from the insurance company offline or online. Here’s how you can do it via the offline mode:

• Inform the insurance company
• File a police FIR
• Submit an application to the insurance company
• Obtain an indemnity bond and submit it to your insurer

The offline mode will take you longer and is complicated.

The online mode is effortless. All you need to do is:

• Log in to the Ombrella app.
• Enter your details - name, policy number, contact details, etc.
• Choose the option to download your motor insurance policy
• You will receive a mail from your insurer with a copy of the policy
• You can download and print it