Most individuals have insurance of some type, whether it is for their life, their home, or their automobile. However, the majority of us rarely pause to consider what insurance is or how it functions.

Simply said, insurance is a contract, symbolized by a policy, whereby a policyholder receives financial protection or payment from an insurance firm against losses.

In this article, you will learn about the basics of insurance, what the 3 most important insurance in Nigeria are, and the different kinds of insurance coverage required in Nigeria.

What are the basics of Insurance?

Most individuals have insurance of some type, whether it is for their life, their home, or their automobile. However, the majority of us rarely pause to consider what insurance is or how it functions.

In a nutshell, insurance is a contract, symbolized by a policy, in which a policyholder receives financial security or compensation from an insurance firm against losses. In order to make payments to the insured more manageable, the firm combines the risks of its clients.

In Nigeria, insurance is similar to insurance anywhere else on the globe. People acquire insurance essentially for the same reason: life is unpredictable. Even if everything may appear to be going well right now, you never know what may happen the next minute. Therefore, it’s important to be secure in case something unplanned occurs.

What are the 3 most important insurances?

There are many various kinds of insurance plans available, and almost any person or organization can find an insurance firm that will insure them—for a fee, of course). Auto, health, homeowners, and life insurance are the most popular categories of personal insurance plans.

Property Insurance

An important type of insurance is property insurance. In fact, it is one of the most common types of insurance in Nigeria. Property insurance allows the insured to make claims for reimbursement as long as they are covered.

People often make use of property insurance to protect their property/properties from unexpected losses. Which may be a result of a fire outbreak, flood or other occurrences.

Home insurance is necessary for the majority of homeowners, but there are several plans available for renters, owners of mobile homes, those looking for the most basic protection, and those residing in very ancient homes.

It is, however, important that before a claim can be made, it must be as a result of the specified risk. Most landlords and real estate investors make use of this in order to safeguard their property. The property insurance may include homeowners insurance, renters insurance, flood insurance etc.

Health insurance

The most significant sort of insurance you’ll ever purchase is health insurance. This is due to the fact that if you don’t have health insurance and something goes wrong, your life is at stake as well as your money.

The purpose of health insurance is to cover the expense of medical care. Many people receive health insurance via their employers, who subsidize the cost of the premiums. This means that your company covers most of your premium and you contribute a small amount with each paycheck.

You must purchase health insurance on the open market if your company does not provide coverage.

Life insurance

The simplest and least expensive form of insurance is life insurance. For most people, life insurance works the best. As soon as you pay the payment, you are covered.

Numerous life insurance products not only provide your loved ones with a safety net in the case of your passing but also offer wonderful living advantages like interest on savings, tax breaks, cash back, and more. Education plans and life savings are two excellent examples of life insurance policies.

How many different kinds of insurance coverage are required in Nigeria?

In Nigeria, the federal government made certain some insurance is mandatory. These insurances mostly compel employees to treat their workforce fairly. In Nigeria, the following types of insurance plans are required:

• Third-party auto insurance
• Corporate life insurance
• insurance covering medical malpractice
• Insurance for public buildings or occupiers’ liability
• Construction site insurance or builders’ liability insurance
• Third-party insurance for aviation
• Marine protection