Why traders shun insurance cover against fire
IGNORANCE and lack of confidence in insurance industry have combined to discourage traders and artisans from taking insurance cover against unexpected fire outbreak, the occurrence of which has wreaked havoc on many markets and workshops in Lagos.
Last week, goods and property worth millions of Naira were destroyed by fire at the popular Berlin Market, near Mandilas on Williams Street, off Marina in central Lagos.
The incident occurred four days after five buildings were razed in Balogun Market located also in central Lagos.
The Coalition of Markets and Traders Associations in Lagos has said that despite being law abiding and loyal to both the federal and state governments, none of its members whose shops and wares were gutted in fire outbreaks, ever gets compensated by the governments.
The traders disclosed this at an extraordinary general meeting of the coalition made up of Association of Igbo in Commerce, Traders Rights Protection Initiative, Amalgamated Traders, Lagos and Market Leaders Association of Nigeria, in the over 120 markets in Lagos, held recently at the Meals and Events Centre, Okota, Lagos.
Available records at the Lagos State Fire and Safety Services revealed that properties worth N54 billion have been lost to fire in Lagos in the last three years.
The records showed that the losses were higher in 2012 compared to 2013 and 2014.
In 2012, properties valued N39 billion were destroyed while in 2014, a total of N14.99 billion worth of properties were consumed in various disasters that hit the mega city.
Though properties worth N106.44 billion were saved in 2013, the fire service records did not indicate the value of properties destroyed in that year.
In 2015, going by the number of fire outbreaks already recorded so far between January 1 and now, with losses estimated at billions of naira including four lives, there is urgent need to look for how to prevent fire outbreak in Lagos.
The recent fire outbreaks included Balogun Market fire on Lagos Island, Oko Baba Sawmill in Ebute Meta and another in Igando area where four houses were razed.
Razaq Fadipe, the Director of the State Fire Service attributed all most all the fire outbreaks to human error, saying, “It is not harmattan that causes fire but human error. Harmattan causes the fire to spread faster because of the dry wind.”
According to him, in 2013, a total of 1,774 fire outbreaks occurred. The fire service acknowledged there were massive losses to fire in that year, claiming the losses were difficult to quantify. In 2014, the value of goods lost to fire in the state was put at N14.99 billion while N89.94 billion worth of properties were saved from about 1,499 fire cases recorded between January and November.
Fadipe, who admitted that there are challenges bordering on difficulties in accessing the scenes of fire by his men, due to congestion and the attitude of the residents, said public enlightenment was aimed at reducing incidents of fire in the state.
A victim of the recent fire outbreak in one of the markets, told The Guardian that she does not know how to get insurance cover and which insurance company to approach to get it.
Mr. Ebenezer Orefuye, a retired veteran insurer, who is now an insurance broker, said though it is possible for the traders to insure their goods against unexpected fire outbreak, the reason why many of them (traders) are unwilling to do so is because many of them are ignorance about such cover, and that where there is some awareness about how to procure insurance, the lack of confidence on insurance companies to pay compensation when the need arises have discouraged many of them from doing so.
Nelson Nkwor, also a veteran underwriter who is now a lecturer in one of the country’s universities, confirmed that there are products in the insurance industry that cover fire outbreaks in markets.
While saying that the failure of some insurance operators to pay genuine claims in the past might have dented the reputation of insurance companies, he explained that the present Nigerian Insurance Commission (NICOM) has done a lot to sanitise the sector by ensuring that only the companies that are honest and trustworthy remain in business.
He disclosed that NICOM –– the apex regulatory institution of the insurance industry –– has done a lot to sanitise the sector by reducing the number of insurance firms from 183 to currently 59 nationwide.
He urged the traders to avail themselves of the services of the genuine insurance companies now operating the country even as he also enjoined NICOM to embark on massive awareness campaign to let the people know what has happened in the industry to encourage patronage.
He said the NICOM also owes it a duty to let the insuring public know what is expected of them to get compensation when the unexpected happens.
He stressed the need for uberrima fides (utmost good faith) a principle used in insurance contracts, legally obliging all parties to reveal to the others any information that might influence the others’ decision to enter into the contract.
He advised those who must get insurance cover for their goods, shops or warehouses to be ready to disclose the accurate worth of their goods and must not indulge in fraudulent claims from insurance firms when the need arises.