Demand for flood insurance rises on increased awareness
There is rising demand for flood insurance cover in the market now, following increasing awareness since the last flood incidents in Lekki, Victoria Island and Ikoyi Axis and Benue State.
This development has put many homes in more exposed areas under tension given the non- predictability of the weathers.
However, premium for flood insurance, which hitherto was given at almost free by insurers because it was almost non-existent risk has gone up as result of increased awareness.
After the Lekki, Victoria Island experience where many homes in that highbrow area was submerged, awareness for flood cover became more.
Now with the recent havoc in Benue where no fewer than 15,000 people have been reportedly sacked from their homes, with over 2,000 houses submerged, the risks can no longer be taken for granted.
Flood insurance before now was never taken seriously in Nigeria because the risk exposure was almost nonexistent. So, insurers could dash flood cover for free to the insured when they buy fire, burglary and home owner’s insurance cover. So, flood cover is given as policy extension for fire policy, and so covers damage or loss to a property because of fire. It is a specific form of insurance in addition to homeowner’s or property insurance.
But the dynamics have changed since the recent which resulted to huge claims for insurance companies.
“A lot of people are filling claims now as result of damages that arose from the Lagos flood, and so flood cover can no longer be taken for granted, Eddie Efekoha, chairman, Nigerian Insurers Association (NIA) said.
He noted that flood is often an extension of fire cover, adding that most insurance companies do offer the cover for free, especially in areas not prone to flood.
“I have told my staff that going forward, flood policies will be properly charged and if any one gives it away for free and there is claim, i will take it from the persons salary, one of the insurance CEO’ s said.
The CEO observed that, with recent developments, awareness about the benefits of insurance is growing because people can no longer allow themselves to be exposed dangerously like that, when they could pay small amount of money and pass it to the insurance companies.
Jide Orimolade, managing director, Law Union &Rock Insurance commenting on the recent flood in Lagos sympathized with victims and attributed the cause to issues including dumping refuse indiscriminately especially in drainage channels, people building on drainage channels, poor urban planning, change in weather pattern, heavy storms, construction on drainage facilities, failure to heed to flood warnings and global climate change.
He however stated that some measures could be taken to avoid future occurrence, and one of such is Householder/ House Owner Insurance
“These insurance policies are for Landlords and Tenants respectively. They cover the insured’s property against fire, theft, flood and other allied perils, Orimolade stated.
Nimi Akinkugbe, financial adviser and expert on money matters said “We live in uncertain times. Violent floods and storms, volcanic eruptions, earthquakes, tsunamis, hurricanes; the list goes on. Such disasters have one thing in common; they are “catastrophic risks” that are not likely to affect you in your lifetime, but if and when they do happen, the consequences can be devastating. Because such risks are so rare and unpredictable, often striking without warning, they can be badly underestimated. Yet just being prepared can save you from untold distress. “
According to Nimi, Insurance is a crucial instrument that sadly most Nigerians still ignore; that is, until they need it most.” Indeed, according to a US survey, 2 out of every 3 homes are underinsured. In Nigeria, the question isn’t about under-insurance, it is about how many Nigerians are insured in the first place; most are not.”
“Are you one of thousands of Nigerians who suffered terrible damage to your property from the recent deluge of rain in July? There is no better time to revisit the issue of insurance than when we have a live and practical situation that brings home this critical issue. How well are you protected against flooding and, indeed, other disasters? You will find that the insurance premium is a small price to pay for the peace of mind of having your belongings insured.”
Modestus Anaesoronye