What insurance do you need for Nigerian property?

Authored by the expert who managed and guided the team behind the Nigeria Property Pack

Everything you need to know before buying real estate is included in our Nigeria Property Pack

Who is the author of this content?

THE AFRICANVESTOR

A team specialized in real estate investing in African countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Nigeria. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At The AfricanVestor, we explore the Nigerian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Lagos, Abuja, and Port Harcourt. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Do you own the property outright or have a mortgage that requires specific insurance?

Mortgage status directly determines your mandatory insurance requirements in Nigeria.

Nigerian lenders require fire insurance as a minimum coverage for all mortgaged properties. This requirement is non-negotiable and must remain active throughout the mortgage term.

Banks typically specify the exact insurance amount, which usually matches the outstanding loan balance rather than the property's full value. Some lenders mandate comprehensive all-risk policies that include fire, flood, and other perils.

Property owners who purchase outright have more flexibility in choosing coverage types and amounts. However, even cash buyers should consider comprehensive insurance given Nigeria's diverse risk factors.

Lenders often have preferred insurance providers and may require proof of coverage before disbursing mortgage funds.

What type of property do you own since residential, commercial, and mixed-use need different policies?

Property classification fundamentally changes available insurance options and coverage requirements in Nigeria.

Residential properties typically qualify for standard homeowner policies covering fire, theft, and natural disasters. These policies range from basic fire coverage to comprehensive all-risk protection.

Commercial properties require robust liability coverage due to higher foot traffic and business operations. Professional indemnity and public liability become essential for office buildings, retail spaces, and industrial facilities.

Mixed-use properties need hybrid policies addressing both residential and commercial risks. Insurance companies often customize coverage to reflect the property's specific use breakdown.

Premium calculations vary significantly between property types, with commercial properties generally commanding higher rates due to increased liability exposure.

Where exactly is your property located since risks vary dramatically across Nigerian states?

Location determines specific risk factors and insurance premium calculations across Nigeria's diverse regions.

Lagos properties face significant flood risks due to coastal location and inadequate drainage systems. Insurance companies charge higher premiums for properties in Victoria Island, Ikoyi, and other flood-prone areas.

Northern states like Kano and Kaduna have different risk profiles including security concerns and seasonal weather patterns. Insurance coverage and pricing reflect these regional variations.

Abuja properties generally enjoy lower risk ratings due to better urban planning and security infrastructure. However, some areas still require specific coverage for seasonal flooding.

Rural properties across all states may face challenges accessing comprehensive coverage, with some insurers limiting policies to basic fire and theft protection.

What is your property's current market value and rebuilding cost for adequate coverage?

Accurate valuation ensures proper coverage amounts and prevents costly underinsurance scenarios.

Valuation Type	Purpose	Typical Range (₦ million)
Market Value	Determines property worth for sale	50-500+ (Lagos prime areas)
Rebuilding Cost	Insurance coverage calculation	30-80% of market value
Replacement Value	Full reconstruction including materials	40-90% of market value
Contents Value	Personal property coverage	10-30% of property value
Land Value	Usually excluded from building insurance	20-40% of total property value

Do you need protection against fire, flood, and natural disasters common in Nigeria?

Natural disaster coverage addresses Nigeria's most frequent property risks and should form the foundation of any comprehensive policy.

Fire insurance remains the most essential coverage type, required by law for mortgaged properties and strongly recommended for all others. Nigerian insurers typically cover accidental fires, electrical faults, and lightning strikes.

Flood insurance becomes critical for properties in Lagos, Delta, Rivers, and other coastal states. The 2022 flooding affected over 600 communities nationwide, highlighting this coverage's importance.

Windstorm coverage protects against seasonal weather patterns affecting different regions at various times throughout the year.

It's something we develop in our Nigeria property pack.

Have you considered burglary, theft, and vandalism coverage for high-risk areas?

Security-related coverage becomes essential given varying crime rates across Nigerian neighborhoods and cities.

Burglary insurance covers forced entry, theft of contents, and property damage during break-ins. Premium rates vary significantly based on neighborhood security profiles and property location.

High-risk areas in major cities command premium increases of 20-50% compared to secure neighborhoods. Gated communities and estates with private security typically qualify for discounted rates.

Vandalism coverage protects against intentional property damage, graffiti, and destruction of fixtures. This coverage becomes particularly relevant for vacant properties and those in transitional neighborhoods.

Some insurers require specific security measures like burglar alarms, security guards, or reinforced doors before providing coverage in certain areas.

Do you need liability insurance for potential tenant, visitor, or worker injuries?

Liability coverage protects against legal claims arising from injuries or accidents on your property.

Public liability insurance covers injuries to visitors, delivery personnel, or passersby on your property. Coverage typically ranges from ₦5 million to ₦50 million depending on property type and risk exposure.

Tenant liability becomes crucial for rental properties, protecting against claims from tenants injured due to property maintenance issues or structural problems.

Professional liability applies to commercial properties where businesses operate, covering claims related to professional services or business operations.

Domestic worker liability covers injuries to household staff, gardeners, or maintenance personnel working on residential properties.

Are you renting out the property and need landlord insurance for income protection?

Rental properties require specialized landlord insurance beyond standard property coverage.

Rental income protection covers lost rental payments when properties become uninhabitable due to covered damages. Coverage typically provides 12-24 months of rental income replacement.

Malicious damage by tenants coverage protects against intentional property destruction beyond normal wear and tear. This coverage addresses damage from non-paying tenants or property disputes.

Legal expenses coverage helps with tenant eviction costs, rent recovery, and property-related legal proceedings. Legal costs in Nigerian courts can be substantial and unpredictable.

Alternative accommodation coverage pays for temporary housing if landlords need to relocate tenants during major repairs or renovations.

Are you building or renovating and need construction all-risk insurance?

Construction projects require specialized insurance covering unique risks during building phases.

Construction Risk	Coverage Details	Typical Premium Rate
Site Materials Theft	Covers stolen cement, steel, equipment	0.5-1.5% of project value
Worker Injuries	Compensation for on-site accidents	1-3% of labor costs
Structural Collapse	Design flaws, foundation issues	0.3-0.8% of project value
Weather Damage	Rain, wind damage to incomplete structures	0.2-0.6% of project value
Third Party Liability	Damage to neighboring properties	₦2-10 million coverage
Equipment Breakdown	Construction machinery, tools	2-5% of equipment value
Delays and Extensions	Additional costs from covered delays	1-2% of project value

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Nigeria versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Do you need group insurance if your property is part of an estate or gated community?

Properties within organized developments often require or benefit from group insurance policies covering shared risks and facilities.

Estate-wide policies typically cover common areas, security facilities, roads, drainage systems, and recreational amenities. Individual property owners contribute through service charges or association fees.

Gated community insurance addresses collective security measures, entrance gates, perimeter fencing, and shared infrastructure. These policies often provide better coverage at lower per-unit costs.

Homeowners association bylaws may mandate participation in group policies, making individual coverage supplementary rather than primary.

Group policies frequently exclude individual property interiors, requiring separate coverage for personal belongings and interior fixtures.

Have you checked mandatory insurance requirements from state governments or property associations?

Legal requirements vary across Nigerian states and can override individual insurance preferences.

Lagos State requires specific insurance coverage for certain property developments, particularly high-rise buildings and commercial complexes. Compliance verification occurs during building approvals and certificate of occupancy processes.

Property associations in organized estates often mandate minimum insurance coverage as condition of ownership or residence. These requirements typically exceed basic fire coverage.

Federal mortgage institutions may impose additional insurance requirements beyond basic lender demands, particularly for government housing schemes.

It's something we develop in our Nigeria property pack.

Have you compared Nigerian insurers for premiums, exclusions, and claims payment records?

Insurer selection significantly impacts coverage quality, claims processing speed, and overall policy value.

1. **Premium Comparison Factors** - Location-based pricing variations - Property type and age adjustments - Coverage limit options - Deductible amount choices - Multi-policy discounts availability 2. **Policy Exclusions to Review** - Flood coverage limitations in coastal areas - Security-related restrictions - Maintenance-related damage exclusions - Acts of war or civil unrest - Pre-existing structural issues 3. **Claims Payment History Research** - Average settlement timeframes - Percentage of claims paid versus denied - Customer satisfaction ratings - Financial stability ratings - Complaint resolution processes 4. **Recommended Nigerian Insurers** - AIICO Insurance Plc - Leadway Assurance Company Limited - NSIA Insurance Limited - Guinea Insurance Plc - Sovereign Trust Insurance Plc 5. **Due Diligence Steps** - Request policy wording samples - Verify National Insurance Commission licensing - Check financial strength ratings - Review online customer feedback - Consult with insurance brokers for market insights

It's something we develop in our Nigeria property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. National Insurance Commission Nigeria
2. Central Bank of Nigeria
3. AIICO Insurance Plc
4. Leadway Assurance Company
5. NSIA Insurance Limited
6. Guinea Insurance Plc
7. Sovereign Trust Insurance
8. Lagos State Government