You may be among the Nigerians who do not know about Home Insurance or even why you need one or how to get one, until disaster strikes. Be prepared for uncertainties, and your home is one place you shouldn’t trifle with.
In this post, I will be discussing insurance covering your home, what it is, why it is beneficial to have one, and how you can access it for your own good.
In 2014, during my paid employment, I left the office in the afternoon for a quick lunch. It was a hot mama-put joint. I was right around the corner when I saw people shouting and throwing whatever they could find, as this huge fire engulfed this semi-detached 4-Bedroom duplex.
The story was that the owners were not at home and it was a spark from an electrical fault. Good Samaritans helped to bring the fire down to keep it from spreading and entering the neighbouring house. At a glance, the building was damaged and we the onlookers thought it will be abandoned for a while; at least I thought so.
Barely 3 months after the fire outbreak, the building was back to a better glory. I marveled at the speed with which the building was repaired. I know people have money, but there are some kinds of money that are only accessed quickly if you had a disaster savings account like home insurance.
Let’s look into this, shall we?
Table of Contents:
What is a Home Insurance?
Benefits of Owning an Insurance.
Types of Home Insurance.
Factors that affect your Insurance access.
Reducing Insurance costs for your home.
How to Secure a Home Insurance Package in Nigeria.
What is a Home Insurance?
Home (homeowner) insurance is a policy that protects you financially by reimbursing you partly with the funds for taking care of damages on a property for which the insurance was set up. It covers any losses or damages that were agreed upon between the homeowner and the Insurance company.
Emphasis on “agreed” because that’s how insurance policies work. If the agreement was to protect you from fire-outbreak and there was no agreement for theft and robbery, in the event of a home robbery, the insurance policy is not covering you.
In setting up insurance, you must take into consideration all facets of disaster, but note that some insurance companies may not have policies that cover anything caused by natural disasters such as earthquakes, flooding, and the like.
If your home is located around areas prone to disaster, you will need to look into specialized insurance packages for your home.
Insurance is not just setting up a place you can collect money for damages, it’s a place you put in money or you save money for the emergencies you agreed on with an insurance company.
Read also Understanding Shortlet Apartment: How to Invest in Nigeria.
When you incur damages and you report to your insurance company, they will conduct an investigation to determine the estimate required to fix the loss or damage, and if approved, they will pay the part agreed upon, usually about 60%, not 100%.
That 60% is from the money you have been paying to them. It’s not miracle money.
Depending on your agreement with the insurance company or how urgent it is for you to fix the damage, you may (or may not) have to first spend your money (the available money you have in your regular bank account) to fix the damage, then apply to your insurance company for a reimbursable. This application is known as filing a claim. The process of filing a claim requires you to have recorded proper evidence of damages done to your property.
Note that they will not give you all the money you spent, only a percentage as agreed, will be reimbursed.
Benefits of Owning an Insurance.
It serves as financial cover for you from any agreed negative event. It gives you peace of mind to simply say, “Don’t worry, my insurance will cover it”.
Types of Home Insurance.
In securing insurance for your home, you need to know the types of coverage available to you and how much you are required to put in (monthly or annually), how much you can take out for addressing damages, and the parameters for deciding the extent of the damage.
Every insurance company has various packages they cover for your home and here are the ones that cut across them.
- Building Insurance. This covers the interior or exterior of the building.
- Contents Insurance. This covers furnishings and items inside your home.
- Personal liability insurance. This covers loss or damages on personal assets and belongings such as expensive jewelry, gold, etc. This also includes injuries or accidents gotten in while on your property.
Factors that affect your Insurance access.
There are things that can affect the extent of coverage your insurance policy has. This includes the location of your home, the age of the building, and the condition of the building.
A newly built home will get better/premium insurance coverage compared to a building of over 10 years. The insurance company is considering that there may already be damages hidden in the building (such as cracks from faulty foundation works) that they will have to cover sooner than they planned.
Remember that these companies are out to make money from the money you pay to them before you require it to fix any damages.
Reducing Insurance costs for your home.
There are things you can do within your home to reduce the monthly or annual costs that will be required of you. Take measures to safeguard and reduce fire outbreak damages by installing smoke detectors and sprinklers.
Fix electrical faults as soon as it occurs and you notice them. Stop managing it or procrastinating.
Set up a burglary alarm for your doors and windows, including the roof. Thieves have been known to enter buildings through the roof and that’s why I always recommend a concrete floor for the roof, then a simple lean-to roof or a gable roof to protect the concrete.
How to Secure a Home Insurance Package in Nigeria.
When applying for home insurance, it is very important to provide accurate information about your home and its contents. Be ready to declare everything you need to be insured. Inaccurate or false information can be detrimental to your insurance policy. It could affect your claims (if found out) and in extreme cases could get you jail time.
You might need an insurance broker to help you with the necessary information you are required to gather by a particular insurance company.
Here is a list of the top insurance companies in Nigeria offering home insurance premiums.
Read through here to find other insurance companies available in Nigeria.
Most of these companies are located in Lagos, Abuja, Port-Harcourt, etc. Some have no online presence and you may be unable to visit their offices. Should you be interested in any of the insurance companies, remember to conduct your due diligence.
I hope you have a better understanding of home insurance and you are planning to get one.
