Home Insurance in Nigeria

Homeowners insurance provides coverage in the event of damage to your property, as well as liability for injuries and damage you cause to other people.

To some Nigerians ,acquiring home insurance seems to imply that the home will burn down, be burgled or be damaged in some way, this isn't the case. Getting an insurance policy is simply a case of just in case precaution measure which gives peace of mind.

In Nigeria, the home owner may acquire a Home Owner Comprehensive policy which insures the house as well as the possessions or personal property within the house against fire, burglary and even natural disasters such as floods and earthquakes. In addition, the home owner could get a Public Liability policy. A Public Liability policy covers accidents that happen to other people on the property for which you may be held responsible, such as a neighbour tripping on broken steps on your property.

A tenant is usually advised to buy a House Holder Comprehensive policy. This insures the possessions or personal property within the house against fire, burglary and natural disasters.

The difference between House Owner and House Holder policies is that with the House Holder policy, only the possessions are insured as opposed to the House Owner policy where the dwelling as well as its possessions are insured.

Insurance companies sells home insurance in terms of actual value and replacement value. A home insurance policy coverage for the replacement value of a home means that if a claim is made, the client will be paid back the amount for which he initially insured the property. For example, if a house was insured for N6million in 2004 and a claim is made in 2008, the insurance company pays N6milion inspite of the fact that the house may now be worth a lot more than that. On the other hand, getting home insurance coverage for the actual value of the property means that if a claim is made, the current value of that property, and not the value it was when it was insured, will be paid. The only drawback to using a home insurance policy for the actual value is that you'll usually pay higher premiums.


Choosing the right insurance company

One of the best way to choose the right insurance company is to consult an Insurance Broker. Unlike an agent who works for a specific company, an insurance broker is not restricted to working with any insurance company in particular. However, it is important to note that a broker is a professional and would charge fees for consultation.

Insurance companies in Nigeria are required to be registered with the National Insurance Commission (NAICOM) so make sure you look out for insurance companies that are licensed by NAICOM to operate.

It is important to find out as much as possible about an insurance company or underwriter before settling on one. In Nigeria, insurance companies licensed to practise as life insurance companies are required to have a capital base of at least N150m, non-life insurance companies, N250m and composite insurance companies (those licensed as both life and non-life insurance companies) are required to have a capital base of at least N350m.


What happens after choosing an insurance company?

The procedure for buying insurance after chosen a company differs between organisations but generally, after discussions to determine the requirements of the client, the insurance company gives the client a proposal form and asks that he prepare a document indicating the type of property to be insured and also list the possessions within the house as well as their values. The property and possessions are viewed by a representative of the insurance company and a premium is determined. The premium is the amount that the client pays for the insurance policy he has chosen. Insurance policies are written as 1-year long contract, which has to be renewed each year. The premium increases each year as the policy holder accumulates more personal property or the possessions increase in value or the house itself increases in value. 

Home insurance is one of the most sensible things to do once you have a home. However, it is important to read insurance policies carefully or have your lawyer read them before signing any document. Nobody hopes to have cause to need insurance but you would sleep better at night knowing your home is protected.


 

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