property insurance
Property insurance pays to repair or rebuild your building and its contents after fire, flood, theft or other listed disasters damage them.
In plain English
Mrs Adaeze built her four bedroom house in Enugu over twelve years, saving from her tailoring business and adding one block at a time until the roof finally went on.
Six months after she moved in, a faulty generator wire started a fire in the passage while she was at a vigil, and by morning half the roof and most of her furniture were gone.
She had spent so much energy building that house that nobody had mentioned insuring it, so the rebuilding money came from a loan, from her children abroad, and from selling a small piece of land she had planned to keep.
Property insurance exists for exactly that gap between the disaster and the rebuild, covering the physical structure and often the contents inside it against fire, flood, storm, theft and similar named risks, in exchange for a premium paid yearly.
In the UK, a landlord renting out a flat in Manchester to tenants will usually be required by the mortgage lender to hold buildings insurance, because the bank has money tied up in that property too and wants it protected.
A Nigerian in Leeds sending money home to complete a family house in Aba should ask whether that house is insured once it is habitable, because the ₦2,000,000 wired for the roof deserves the same protection as a UK bank would demand for its own asset.
A shop building in Lagos worth ₦18,000,000 is insured for a premium of ₦90,000 a year. When a burst pipe from the shop upstairs floods the ceiling and stock, the insurer pays for repairs and damaged goods instead of the owner covering it alone.
Questions people ask
Does property insurance cover the land itself?
No, land cannot burn down or flood away in the same sense, so property insurance covers the building structure and, if chosen, the contents inside, not the plot underneath it.
Is property insurance compulsory in Nigeria?
It is not compulsory by law for private homeowners, though banks financing a mortgage will usually insist on it, and it is simply wise given how common fire and flood damage are.
What is usually excluded from a standard property insurance policy?
Gradual wear and tear, poor maintenance, war, and sometimes flood or earthquake unless specifically added, are common exclusions, so it pays to read the policy schedule closely.
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