Robbers Stole My Car! Will My Insurance Help Me?

How Auto Insurance can help in your car security even if it’s been stolen..

I recalled an incident that occurred some years back. It happened that a young man was robbed on his way from a party. The robbers snatched his car, and he was left to hitch a ride back home.

In anger, he notified his insurer of the incident and demanded a replacement car since he has insurance. His insurers sympathized with him for the loss and to his greatest shock politely informed him that the claim would not fly because his car was not covered! Out of frustration, he decided to sue his insurer, but he lost the case.

The question now is: Why was the man’s claim rejected? Why was his car not covered, since he possesses insurance then he should be compensated?

The scenario above bothers on the issue of uninsured risks. Let us take a critical look at it for better understanding. For the car in question not to be replaced, then it would have been insured on Third Party Only Motor Policy which is the minimum cover available.

It is important to know that there are four types of motor insurance which include, Act Only, Third Party Only Cover, Third Party Fire & Theft and Comprehensive. However, in practice presently only three types of coverages issued to vehicle owners which include:

RELATED: Third Party Motor Insurance in Nigeria

Third Party Only Motor Insurance

This is the minimum insurance yet. It indemnifies the policyholder for death, injury or property damage to third parties as a result of accident due to the use of the policyholder’s vehicle.

What/Who Is Covered?

This policy covers:
1. The legal liability of the policyholder to third parties as a result of damage to the property of such third parties and any injury or death to third parties from using the vehicle.
2. The legal fees for the legal representation of the insured or his driver at any judicial proceedings due to an accident and any other expenses of the policyholder.
In summary, the following are covered:

• Other Motorists
• Members of the public and their properties
• Pedestrians

What/Who Is Not Covered
The following are not covered:

1. Any damage to the policyholder’s car
2. Death or injury to your family members (they are not third parties)
3. Loss or damage to your properties or that of your family members
4. Theft of your vehicle

Third Party Fire & Theft Motor Insurance

This is a type of cover that goes a step ahead of Third Party Only Cover. In addition to all the cover provided in Third Party Only, it is extended to protect the policyholder’s vehicle for loss as a result of fire and theft.

What/Who Is Covered?

This policy covers:
1.The legal liability of the policyholder to third parties as a result of damage to the property of such third parties and any injury or death to third parties from using the vehicle.
2.  The legal fees for the legal representation of the insured or his driver at any judicial proceedings due to an accident and any other expenses of the policyholder.
3.Loss of or damage to the policyholder’s vehicle and accessories as a result of fire, external blast, self-ignition or lightning, burglary, housebreaking or theft.

In summary, the following are covered:

• Other Motorists
• Members of the public and their properties
• Pedestrians
• Theft of policyholder’s vehicle
• Loss or damage to the policyholder’s vehicle as a result of fire is covered

What/Who Is Not Covered

1. Damage to the policyholder’s car as a result of accident
2. Death or injury to your family members (they are not third parties)
3. Loss or damage to your properties or that of your family members

Comprehensive Motor Insurance

This is the most elaborate form of insurance available. It is an all risk insurance covering both your vehicle, public and their properties.
 
What/Who Is Covered?
This policy covers:
1.The legal liability of the policyholder to third parties as a result of damage to the property of such third parties and any injury or death to third parties from using the vehicle.
2.The legal fees for the legal representation of the insured or his driver at any judicial proceedings due to an accident and any other expenses of the policyholder.
3.Loss or damage to the policyholder’s vehicle and accessories as result of:

• Accidental collision or overturning due to mechanical breakdown or wear and tear
• Fire, external blast, self-ignition or lightning, burglary, housebreaking or theft.
• While in transit
• Malicious (hateful) damage

4.Medical expenses of the policyholder, his driver or any occupant of his vehicle to a defined limit(for private motor only).
In summary, the following are covered:

• Other Motorists
• Members of the public and their properties
• Pedestrians
• Theft of policyholder’s vehicle
• Loss or damage to the policyholder’s vehicle as a result of fire is covered

In Case You Are Robbed…

From our scenario above, assuming the vehicle was insured either on Third Party Fire & Theft or Comprehensive Motor Cover, the young man would be fully indemnified i.e. he would be given a replacement car or monetary equivalent (minus depreciation).

A policyholder has nothing to worry about (provided he has paid the premium for the cover), his insurance would be of great deal of help.

In case of robbery to your insured vehicle, here are the steps to take:

1. Notify your insurer immediately
2. Forward the required documents to substantiate the claim
3. Send the final Police Report
4. Sign the Settlement Offer
5. Receive your cheque

More on How to make a claim in subsequent posts.

Final Words

Your insurance will be lots of help if you have an adequate form of insurance. You need to go beyond the basic or legally required form of insurance to get full cover.