The threat of climate change leads to several catastrophic disasters, one of which is flooding. Nigeria has experienced severe flooding in recent years. In 2017, the rainy season arrived with an uncontrollable frequency of flooding in some coastal and flood-prone areas of the country. Due to this, the Nigerian Insurers Association (NIA) advocated for the separation of flood from fire and special perils, as this initiative would give it the special coverage and attention that such catastrophe deserves.
If you are a homeowner in Nigeria or planning to build one, accepting that preventive measures and insurance make up both sides of the coin, having a receptive mindset towards flood insurance and ensuring its early coverage, and preparing for post-flood risk management if it happens to your property will be helpful.
Continue reading to discover what flood insurance is, why you need it, what its coverage is, and how it works in Nigeria.
What is Flood Insurance?
To define flood insurance, we need to know what insurance means. Insurance is a security put in place against the future occurrence of an uncertain event.
Thus, this insurance is a type of property insurance different from a homeowners insurance policy that protects a dwelling from losses sustained by flood water damages. The cost of purchasing flood insurance in Nigeria varies from one insurance company to another since, presently, there’s no specific body responsible for its operations.
Why Do You Need this Insurance in Nigeria?
You need flood insurance in Nigeria for several important reasons, and you shouldn’t ignore it until post-flood damage occurs. At the end of the day, this insurance serves as an insignificant price to pay for the security of your properties and the stability of your mind’s peace. Read further to know the five reasons researched and curated for you below:
1. Flood Insurance is a Recommendable Flood Risk Management Strategy
Due to its diversity and large population, the status of flood and its disastrous damages in Nigeria sometimes turn out inaccurate. The result of this yearly disaster causes displacement, rural-urban frantic movement, property loss, starvation, environmental degradation, low economic productivity, and lastly avoidable death.
An implementation of flood insurance will not only evaluate previous records but also provide valid statistics or ratings of flood recurrent in Nigeria. Furthermore, an early inspection of suspected high-risk areas would be performed since a miscalculation of this fact gives inhabitants a false sense of security which may lead to ignorant investments in these areas and jeopardize flood damage mitigation.
2. Flood Insurance Guarantees Your Building Coverage
This means that in the case where a flood damages your building and electrical systems, flood insurance guarantees your house gets rebuilt and spoiled house systems repaired.
3. Flood Insurance Ensures Personal Property Coverage
Unlike building coverage, personal property coverage (also known as contents coverage) involves safeguarding housewares, clothes, furniture, and electronics that would be affected by the flood. For example, if your couch gets spoiled, this kind of coverage ensures you get a repair or replacement. However, some contents this flood insurance does not cover are:
- Damaged cars since auto insurance is responsible for this.
- Areas like swimming pools and fences.
- Mold and mildew.
- Additional living expenses such as hotel lodging.
4. Flood Insurance Keeps Unreliable Financial Aid From the Government at Bay
To prevent government financial aid from being your sole solution in the face of flood damages, it’s essential to purchase a flood insurance policy before beginning the building process or when it’s ongoing or completed.
5. Flood Insurance is Important for the Measurement of National Development
If the reoccurrence of floods in coastal and flood-prone areas of Nigeria is mitigated by a high demand for flood insurance by Nigerians, this becomes important for measuring the lengths of our national development.
Flood insurance would prevent the loss of investments like flooded farmlands which leads to the decrease of food stock supply in the markets. Additionally, the frantic movement from rural-urban cities will be curtailed as certain human development will be initiated and done in these rural areas.
How Does this Insurance Work in Nigeria?
As previously stated above there’s no one body responsible for flood insurance in Nigeria, unlike the United States which has the National Flood Insurance Program (NFIP).
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Since Nigeria lacks a known governmental body that offers this insurance and pushes its awareness to the public, you will need to consult several Nigerian insurance companies and read their policies carefully before purchasing flood insurance from anyone of your choosing as an optional backup to homeowners insurance policies. That is, a homeowner can choose to go with the latter and forgo the former.
Additionally, flood insurance in Nigeria covers these two main areas of coverage for its buyers:
- Building coverage: This area covers the structure of your building from flood water damage.
- Contents (or personal property) coverage: This guarantees that any of your properties damaged during the time of flooding are replaced or repaired.
While it’s advisable to get these two coverages when purchasing your flood insurance, you can choose either one of them.
Other important things to know about how flood insurance works in Nigeria are that:
- Buildings located in high-risk areas are likely to have higher pay rates
- Content coverage costs more when your properties are more valuable
- Filing a claim with your insurance company when your building is affected needs to be done immediately, as wasting time will result in an increase in payout.
The Bottom Line
Flooding is indeed an untimely disaster but you can be prepared for it. In Nigeria, many states experience flooding during the rainy season. Getting this type of insurance will provide you with flood risk management, dwelling coverage, and contents coverage and ensure you are not dependent on governmental financial aid if flooding damages your home. Explore available options for flood insurance in Nigerian insurance companies to protect your property now.
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