Why You Should Value Your Assets Before Insuring Them-Knowing the real worth of your property or business could save you millions

By ESV Nwabuisi David Chimbili, MNIVS, ISMN, RSV.

When the Balogun Market fire swept through Lagos Island in 2023, many shop owners who thought they were covered discovered a painful truth — their insurance policies fell far short. Years of inflation, naira depreciation, and growing inventory had quietly widened the gap between what they insured and what they actually owned. Some traders insured goods worth ₦15 million for just ₦5 million, leaving them dangerously exposed.

The Nigerian Institution of Estate Surveyors and Valuers (NIESV) estimates that more than 70% of insured assets in Nigeria are either under- or overinsured — with most policyholders on the losing side.

The Hidden Coverage Gap
Nigeria’s insurance penetration remains one of the lowest in Africa, but even among those who are insured, coverage quality is a concern. Many property owners still rely on the original purchase price of their assets instead of current market values.

A property bought in Lekki for ₦25 million in 2018 may now cost about ₦60 million to rebuild. Yet many homeowners continue paying premiums based on outdated figures. The same story plays out in factories, warehouses, and farmlands nationwide. With the naira’s sharp depreciation, replacement costs for buildings, machinery, and materials have soared — but insurance values often lag behind.

What Professional Valuation Offers
Professional valuers, under NIESV and regulated by the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON), do far more than assign prices. They assess current market conditions, replacement costs, depreciation, and local market dynamics.

For homeowners, this means accurate assessments of land, structures, finishes, and improvements. For businesses, it covers machinery, inventory, and business interruption risks. In agriculture, it extends to farmlands, equipment, and livestock — accounting for seasonal price shifts and regional risks.

Why Documentation Matters
When losses occur, the biggest challenge for many Nigerians isn’t the claim itself — it’s proof of value. A professional valuation provides independent documentation with detailed descriptions, photographs, and market data. According to NIESV research, claims supported by professional valuation reports are settled faster and more fairly.

Proper appraisal helps policyholders avoid disputes, while providing insurers with verified data they can rely on.

When to Revalue
In a fast-changing economy like Nigeria’s, asset values can shift dramatically within months. NIESV recommends updating valuations annually for high-value assets, and whenever major changes occur — new purchases, renovations, business expansions, or significant market shifts.

Cities like Asaba, Uyo, and Akure are seeing surging property values, while inflation and exchange rate swings continue to alter replacement costs across the country.

Cost vs. Risk
Valuation fees vary, but typically range from ₦50,000 to ₦200,000 for residential properties — a small cost compared to potential losses. NIESV studies show that most Nigerians are underinsured by about 40–65%. For a ₦50 million property, that could mean a ₦25 million shortfall in a total loss situation.

Even overinsurance has a cost, as inflated coverage leads to wasted premium payments. Accurate valuation ensures you pay only for what truly needs protection.

Getting the Right Professionals
Always confirm that your valuer is a registered member of NIESV and licensed by ESVARBON. Specializations matter — a valuer experienced in Lagos real estate may not have the same grasp of agribusiness assets in Kano or factory installations in Aba. NIESV’s register of professionals and firms helps you identify the right expert for your specific property or business.

The Bottom Line
Insurance is about risk management, but it only works when based on accurate information. Without periodic valuation, coverage becomes guesswork — and that guess can prove very costly.

In today’s volatile economy, professional asset valuation is not an option; it’s a necessity. Whether you own a family home in Abuja or a fleet of shops in Onitsha, don’t wait for disaster to expose your coverage gaps.

Protect your investment. Get a professional valuation — and get it right.