MOTOR TRADE INSURANCE FAQs
What is motor trade insurance in Nigeria?
Motor trade insurance covers businesses and individuals involved in the motor trade industry, such as car dealerships, repair shops, and vehicle importers, against risks associated with their work. It covers vehicles in the business's care, whether being worked on, driven, or stored.
What is road risk insurance, and how does it differ from motor trade insurance?
Road risk insurance is a type of motor trade insurance that specifically covers motor traders when driving or moving vehicles on public roads. It’s suitable for traders who handle customer vehicles, test-drive cars, or need to transport vehicles for business purposes.
Who needs motor trade and road risk insurance in Nigeria?
Motor trade and road risk insurance are essential for anyone in the vehicle-related business—car dealers, mechanics, vehicle transporters, and importers—to cover risks associated with vehicle movement, storage, and handling.
What types of cover are available in motor trade and road risk insurance?
There are typically three levels of road risk cover available:
● Third-Party Only: Covers liability for damage or injury to third parties.
● Third-Party, Fire, and Theft: Includes third-party liability, plus coverage for fire and theft of vehicles in the trader's care.
● Comprehensive Cover: Covers third-party risks, fire, theft, and damages to vehicles in the trader's care.
Does road risk insurance cover personal vehicles?
No, road risk insurance only covers vehicles used for business purposes within the motor trade industry. Personal vehicles need separate personal auto insurance.
Can I drive customer vehicles without motor trade insurance in Nigeria?
No, to legally drive customer vehicles on public roads in Nigeria, motor trade insurance with road risk coverage is required. Driving customer vehicles without this insurance could result in fines and liability for damages.
What factors affect motor trade and road risk insurance premiums?
Premiums are influenced by factors such as:
● Business size and type (e.g., dealership vs. mechanic shop)
● Driver age and experience
● Number of drivers and vehicles covered
● Types of cover chosen (third-party, comprehensive, etc.)
How can I make a claim on motor trade or road risk insurance?
To make a claim, notify your insurer as soon as possible, providing details of the incident. You may need to submit documents like police reports, incident descriptions, and any evidence of damage or theft.
What is indemnity in motor trade insurance?
Indemnity is the maximum amount the insurer will pay for a claim, ensuring the business can recover from a loss without profiting from it. This covers repair, replacement, or compensation for insured vehicles within policy limits.
Is motor trade insurance required by law in Nigeria?
While not mandatory, motor trade insurance is essential for motor traders to mitigate the significant risks associated with handling and driving multiple vehicles. Road risk insurance, specifically, is needed to legally drive trade vehicles on public roads.
FLEET INSURANCE FAQs
What is fleet insurance in Nigeria?
Fleet insurance is a policy designed to cover multiple vehicles under one plan, ideal for businesses that own or operate several vehicles, such as logistics companies, rental agencies, or corporate fleets. It simplifies management and often reduces premium costs.
Who needs fleet insurance?
Fleet insurance is beneficial for any business in Nigeria that operates multiple vehicles, including delivery services, taxis, transport companies, and construction firms. It covers all vehicles under a single, comprehensive policy.
What types of cover are available under fleet insurance?
Fleet insurance policies usually offer three levels of cover:
● Third-Party Only: Covers damage or injury caused to third parties.
● Third-Party, Fire, and Theft: Adds protection for fire damage and vehicle theft.
● Comprehensive Cover: Covers third-party liability, fire, theft, and damages to the fleet vehicles themselves.
How many vehicles are needed to qualify for fleet insurance in Nigeria?
While requirements can vary by insurer, most fleet insurance policies in Nigeria require a minimum of three to five vehicles to qualify as a fleet policy.
What are the benefits of fleet insurance?
Fleet insurance offers several advantages, such as simplified management with a single renewal date, potential discounts on premiums, and flexibility to add or remove vehicles as the business grows.
Does fleet insurance cover personal use of company vehicles?
Typically, fleet insurance covers vehicles for business use. However, some policies can be tailored to include limited personal use, so it’s essential to check with the insurer for specific policy terms.
What factors influence fleet insurance premiums?
Fleet insurance premiums are determined by:
● Fleet size and vehicle types
● Driver history and age
● Level of cover selected (e.g., comprehensive or third-party)
● Claim history of the business
Can new vehicles be added to an existing fleet insurance policy?
Yes, most fleet insurance policies in Nigeria are flexible, allowing businesses to add or remove vehicles as needed, with adjustments made to the premium.
How can I make a claim on fleet insurance?
To make a claim, contact your insurer with details of the incident, including documentation such as accident reports, repair estimates, and any necessary police reports. Insurers may assign a claims handler to assist you with the process.
Is fleet insurance mandatory for businesses in Nigeria?
Fleet insurance is not legally required, but it is highly recommended for businesses with multiple vehicles. It provides essential financial protection and simplifies the management of business vehicles.
