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Experts, property owners offer revival strategies for building insurance


In the wake of the new Lagos State Urban and Regional Planning and Development law that mandates property owners to insure buildings above two floors, experts have urged the regulators and professionals to design affordable policy documents for the scheme.

The Guardian’s survey revealed that a large chunk of the population have refused to obtain insurance cover for their buildings, despite its huge benefits such as protection against risks to property, such as collapse, fire, theft and weather damages such as flooding.

Statistics show that out of every 10 properties, hardly would one person subscribe to insurance cover, whereas in public buildings, out of every ten, six would have an insurance cover.


Key reasons for such apathy include; religious beliefs hinged on the fact that ‘God protects and forbids disaster’, ignorance, and difficulties in accessing insurance claims.

The compulsory insurance is rated per plot and floor at N5, 000 each. Two floors building on a plot range from N15, 000 but two floors on two plots are pegged at N20, 000.

Also, premium/ payment is usually determined by the value of the property at a rate of 0.25 per cent, however, because of competition and business relationships this rate is usually flexible.

The Guardian gathered that each risk is assessed and rated accordingly, but basically 0.25 per cent on building value and content can be included at one per cent.

In Lagos, building, which exists and in use prior to the commencement of the law is obligated to submit the certificate of insurance, covering the building to the state’s Building Control Agency (LASBCA) for verification.


The state’s Commissioner for Physical Planning and Urban Development, Dr. Idris Salako stated that the law is desirable to safeguard the physical environment and guarantee the wellbeing and safety of residents. He urged stakeholders to accord the matter the seriousness it deserve, in order to realize the true intention of the law and save the state from needless agony in times of disaster.

The Commissioner further described the newly introduced building insurance requirement as an indication of the state’s determination to secure the built environment and achieve an orderly, organized, livable and sustainable state.

Although the initiative is novel, but there are concerns on the implementation of the new law, as some property owners are averse to the culture of having building insurance cover.

Explaining why the building insurance cover has not been attractive to Nigerians, an official of Cornerstone Insurance PLC, Bukola Praiz blame it on lack of trust in the insurers to actually indemnify in the event of loss. Praiz noted that poor awareness has also made many Nigerians not to understand its benefits and usefulness.

Other impediments, she stated include, the reality that the crux of insurance, which is claim settlement, is hidden from the public. Besides, the level of education of some homeowners affects their choices and decisions. 


To get more property owners on board, she suggested that the premium should be affordable; promote constant awareness with a view of showing people that insurance brings solutions in times of disaster.
She continued, “Operators should contact estates’ residents, landlords and others to arrange for free training, and creating awareness on the benefits of such insurance cover.”

She further recommended that insurers should package policy comprising, Fire and Special Perils (FSP), family personal accident and public liability with discounted and affordable rates.

“Getting more property owners into the scheme would be easy, if it is well enforced by the government through collaboration with banks, especially landowners seeking loan to build and for building under construction.

“One of the ways to scale up the sales is to attach it as a prerequisite to other volatile insurances, for example, you cannot take up Fidelity Guarantee Insurance (FGI), policy without having FSP policy in place”, she stated.


The Chairman, Lagos Branch of the Nigerian Institution of Estate Surveyors and Valuers, Dotun Bamigbola said the whole process has to be worked out and streamlined along with the critical stakeholders such as the government, property managers, owners, and the people who will ascertain the risk level of those properties as well as the insurance firms.

Besides the involvement of estate surveyors and valuers in the process, he suggested that the cover must be adequate, that building owners should be able to get value for insuring their properties.

“There should be a sort of guarantee provided by government who is pushing for it to ensure that property owners are indemnified through a valuation report that ascertain the insurance value of a property. Government must ensure that there is no default or a variance to the insurance value on maturity.”

On affordability of the premium on buildings, he stated that there is responsibility that comes with doing the right thing hence, property owners must be interested in ensuring that they cover their risks appropriately and don’t make a loss at the end of the day.


“Estate surveyors and valuers are working with insurance firms to ensure that the cost is effective, and easily deliver benefits and service to the home owners. The details still need to be worked out and government must ensure that we find a synergy.”

A property owner in Ajah area of Lagos, Mr. Tunde Olumide said, low-income earners power and non-compliance with regulations set out by the government from most insurance firms have remained a disincentive to subscribing to insurance cover for buildings.

For Mr. Femi Olympus, another property owner in Ikeja, most of the insurance firms don’t tell their success stories that could encourage Nigerians to do property insurance cover.

Under the Insurance Act Sections 64 and 65 of 2013, it provides for the compulsory insurance of buildings under construction and public buildings respectively. While section 64 requires that every building under construction that is above two floors must be insured against construction risks, section 65 requires the owner and occupier of every public building to be insured against liability for damage to property, death or bodily injury caused by collapse, fire, and other disaster. But the existence of these provisions hasn’t changed the reluntance of many property owners towards insurance cover for properties.

Building collapse with attendant loss of lives and properties has become a constant and worrisome development in Lagos. Figures obtained from the Building Collapse Prevention Guild, an advocacy group of built environment professionals, showed that out of the 43 building collapse recorded in 2019, Lagos had the highest figure with 17 cases, accounting for about 39.53 per cent of the total number of collapsed buildings.


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