Need for insurance rises as flood risks ravages more states
Recent flood cases across the different parts of the country where thousands of residents were sacked out of their homes by flood and properties worth of millions of naira damaged, has underscored the need to embrace insurance for protection and risk management.
This development which defies whatever religious believe anyone may have because it’s natural, has put many homes and farm lands across the country 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 nonexistent are rising up as result of increased awareness.
After the Lekki, Victoria Island experience a few years back where many homes in that highbrow were submerged, awareness for flood cover became more.
Now with the recent flood havoc again in Niger, Kogi, Anambra and Delta where thousands of people have been reportedly sacked from their homes, farmland destroyed, houses swept off, and lives lost, it is now difficult to be ignored.
Just last week, the National Emergency Management Agency (NEMA) declared national disaster in five news states of Adamawa, Taraba, Rivers, Kebbi and Bayelsa, following devastating flood that ravaged the states.
This, according to the agency, has brought to nine the number of states declared national disaster areas caused by the flood devastation.
The agency had in September 17, 2018 declared four states — Niger, Kogi, Anambra and Delta — disaster areas.
NEMA, in a statement by Mustapha Maihaja, director-general through the agency’s, Sani Datti, head Media and Public Relations in Abuja, said “It will be recalled that on 17th September 2018 national disaster was declared in Kogi, Niger, Delta, Anambra States.
“In consideration of the data and information being received, in particular the Preliminary Damage Assessment (PDA) and guided by relevant NEMA policy documents, additional 5 states are observed to have been impacted severely by the disaster.”
Flood insurance before now was never taken seriously in Nigeria because the risk exposure was almost non-existent. 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 flood, and so flood cover can no longer be taken for granted, said an operator.
The operator 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.
Nimi Akinkugbe, financial adviser and expert on money matters had 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.”
In 2015, less than 20 insurance claims were filled by insurance consumers and about N150 million was paid as claims by the insurance industry.
According to the 2015 Insurance Digest of the NIA, International Energy Insurance Plc paid the largest claim of N23.109 million, followed by Ensure Insurance Plc, which paid N22.562 million.
Flood insurance denotes the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands, floodplains and floodways that are susceptible to flooding.
Modestus Anaesoronye