How a Simple Insurance Policy Could Save Your Family from Debt

Despite the estimated two million cars on the road in Lagos, Nigeria’s commercial capital, owning a car remains more of a necessity than a luxury, especially for mid-level professionals, business owners, and young families. This was the case for Ayodele, a young husband and father who urgently needed a car to juggle work responsibilities and school runs.

With car prices skyrocketing, Ayodele resorted to borrowing from loan sharks to make the purchase. The car immediately eased his daily stress; life felt more manageable. But just a few weeks later, disaster struck: a heavy rainstorm brought down a tree that crushed his car. The damage was extensive and nearly irreparable.

Now back to square one, Ayodele still had to repay the loan but without the car that justified it. Repairing it wasn’t even an option. What made it worse? The situation could have been avoided if only he had taken out a simple, comprehensive car insurance policy.

The Power of a Simple Insurance Policy

According to a 2022 report by Augusto & Co., insurance penetration in Nigeria is only 0.5%. This means that out of over 200 million Nigerians, fewer than 1% have any form of insurance coverage. A staggering statistic in a country where accidents and unexpected losses occur daily from road crashes, fire incidents, robberies and theft.

In Q3 2023, the Federal Road Safety Corps (FRSC) reported a total of 2,187 road accidents across Nigeria. Many of the road incidents are majorly caused by reckless driving, over speeding, and poor vehicle maintenance. In 2024, the Lagos State Government recorded 1,749 fire incidents resulting in over ₦25 billion in losses. Most of the affected properties and businesses were uninsured leaving owners to start from scratch.

In light of these realities, insurance is a necessity and not a luxury. It’s a need, not a want.

If Ayodele (from the story above) had a comprehensive motor insurance policy, the damage to his vehicle would have been covered. If the car had been written off entirely, he would have received compensation for its value. More importantly, had the accident been fatal, a life insurance policy could have provided financial support to his family, helping them repay the loan and avoid deeper hardship. That’s the power of a simple policy.

Sadly, many property and business owners overlook these benefits. Most Nigerian businesses, especially MSMEs, are not liquid and often rely on loans or support from friends and family. In fact, according to a 2024 CBN report, personal borrowing in Nigeria surged by 14%, with over ₦3 trillion in loans recorded. Yet, despite interest rates climbing as high as 30%, many businesses still operate without insurance coverage.

This gap is hazardous as MSMEs are mostly vulnerable. While large enterprises may have some form of insurance policies, most small and susceptible businesses often do not have any form of insurance in place to protect their businesses. So, when disaster strikes, they are mostly left with damage, debt, and no safety net. Debts must always be repaid, regardless of whether the business resumes operations.

Whether it’s fire, theft, robbery, flooding, or even damage from civil unrest (such as the 2020 EndSARS protests, which resulted in over N200 billion in losses for businesses), these risks are real and often unpredictable. A simple insurance policy can prevent such losses from becoming life-altering setbacks. No one should have to start all over again when a simple insurance policy can always fill the gap.

Why Skipping Insurance Is Being Pennywise and Pound Foolish

What is behind the low insurance penetration in Nigeria? While several studies cited barriers such as limited access to technology, poor awareness and weak regulatory enforcement, there is another often-overlooked factor: perception.

Many people still believe insurance is only for the wealthy. One customer with a car worth 30 million naira once remarked, “I’m a great driver. I’ve never had an accident, so I don’t need comprehensive car insurance.” But as we saw in Ayodele’s case, not all risks are within our control. A single unexpected event can destroy an asset and derail financial stability.

Others avoid insurance because they think it is too expensive or too complicated. Ironically, insurance is one of the most affordable financial tools available. For example:

• A basic enhanced term assurance policy can cost as little as ₦ 5,000 per year, and it covers accidental or natural death, permanent disability, and accidental medical expenses incurred by the policyholder.
• A third-party motor insurance policy costs approximately ₦15,000 per year and covers up to ₦3 million in damages, including unlimited life cover in the event of fatalities.

When people reject insurance either because they believe they are careful enough to avoid accidents or feel it is not worth the cost, they are often being penny-wise and pound-foolish.

Think about it: if a car owner refuses to pay ₦15,000 for insurance, but then crashes into another vehicle or causes a fatal accident, they could end up owing millions of naira. The financial and legal burden that follows could have been entirely avoided with just a small annual premium.

What can be insured?

One common reason people avoid getting insurance is simply a lack of understanding. For many, insurance seems complex and there is often uncertainty about what can be insured.

But the truth is simple: almost anything can be insured. At Coronation, we pride ourselves on our ability to offer affordable insurance for everything – from life and property, to health, business, and even everyday household items. Yes, you can insure your TV, refrigerator, solar system, mobile phone, and laptop.

If a particular item or need is not listed in a provider’s standard policy catalogue, you can always engage an insurance broker or underwriter to help draft a custom policy tailored to your asset.

Here are just a few examples of insurance products many people don’t realise they can get:

1. Householder Insurance:

Householder Insurance allows you to insure valuable items in your home even when you are not the landlord. Many people take loans to purchase essential household items like inverters, solar systems, washing machines, generators, televisions, mobile phones and laptops etc. This policy typically costs around 3% of the value of the item per year with a flexible payment options available. It provides protection against fire, theft, loss, and damage giving you a peace of mind and financial security. To put the need in perspective: According to the Crime Experience and Security Perception Survey by the National Bureau of Statistics, Nigeria recorded over 25.35 million phone thefts between May 2023 and April 2024. Many of these phones were bought on credit and their loss pushed owners into unexpected debt. A simple householder insurance policy could have made all the difference.

• Loan Protection Insurance (Credit Life & Mortgage Protection):

Many families are suddenly thrown into financial hardship when the breadwinner who has an active loan passes away or becomes unable to repay. Sadly, loan obligations don’t die with the borrower. But they don’t have to be passed on to their beneficial as well. Credit Life Insurance and Mortgage Protection are two powerful tools designed to prevent such outcome.

1. Credit Life Insurance covers the outstanding balance of personal or business loans in the event of death, permanent disability, or another covered risk.
   1. Mortgage Protection Insurance does the same for home loans thereby ensuring that your loved ones are not left with the burden of paying off a house they can no longer afford.

Both policies typically cost less than 1% of the loan amount annually – a small price for such significant peace of mind.

The story of Uche, a 38-year-old father of two resonates deeply in this instance. He took out a ₦20 million mortgage to buy a modest family home. He was doing well until a sudden illness took his life. Unfortunately, he had not taken out Mortgage Protection Insurance. His wife who grieving and overwhelmed with the huge loss was left with the remaining loan balance and the bank demand for repayment. She couldn’t meet up with the obligation and the house was repossessed just six months later. With a simple mortgage protection policy costing less than ₦200,000 per annum, the entire loan would have been cleared and his family would still have a roof over their heads.

• Rest Easy Lite:

Funerals can be emotionally overwhelming and financially draining. A Rest Easy Lite Policy is specifically designed to ease that burden by covering the funeral expenses that inevitably follow the death of a policyholder. This policy ensures that loved ones don’t have to bear the full cost of funeral arrangements during an already difficult time. Coverage can also be extended to include the policyholder’s spouse, spouse parents and policyholder’s parents. With Rest Easy Lite Policy, families are able to grieve and honour their loved one without financial stress.

• Fire & Special Peril Insurance

Fire is unpredictable and its effects can be devastating. Whether it’s your home, office, or business premises, our Fire and Special Peril Insurance provides protection against loss or material damage caused by fire and a range of other unexpected events. This policy does not just cover fire alone, it also protects you from associated risks like flooding, storm damage, burst pipes, riot and even malicious damage.

• Money Insurance:

Imagine this: you take out a ₦5 million business loan to expand your operations. The disbursement comes in as cash and you are on your way to deposit it or pay suppliers. Then suddenly, a robbery, an accident or even a fire at your office and the money is gone. You are left with nothing to show for it but you still owe the bank. This is the kind of risk Money Insurance is designed to protect against. Money Insurance provides coverage for cash losses in key situations while in transit, in your safe or on your business premises during working hours. It also extends to cash in the custody of key personnel or even damage to the safe itself.

Now, Here’s What You Should Do

If you’ve read this far, then you already know: insurance isn’t a ‘nice-to-have’, it is a necessity. It’s not just about protecting things; it’s about protecting people, your loved ones, your peace of mind, and your future.

Insurance shields you from the financial burden that comes when life takes an unexpected turn. Whether it’s a car, your business, your home, your children’s education, or even your life, almost anything can be insured.

So, don’t wait until it’s too late. Reach out to us today at contactcenter@coronation.com.ng or call 020-1-2774500, 020-1-2774566, or 020-1-2774577 to explore the insurance options that fit your life.

Insurance is affordable. It’s simple. And most importantly, it’s real. There’s no reason you or your family should be stuck in debt when a small decision today can change everything.

Stay smart. Stay protected. Choose insurance.

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