What NIIRA 2025 Means for Nigerian Property Owners Now

The Nigerian Insurance Industry Reform Act 2025 (NIIRA 2025) came into force in August 2025. For property owners and developers in Lagos, it introduces binding obligations and materially higher consequences for non-compliance.

This note sets out what the law requires, who it applies to, and what you should be doing now.

The Core Obligation

NIIRA 2025 makes insurance compulsory for public buildings against fire, structural collapse, and flood. Construction of any building of more than one floor must be insured before work can commence.

Public buildings under the Act include the following:

• Tenement houses of more than one floor
• Hostels and buildings occupied by tenants or lodgers
• Any building accessible to the public for education, medical care, recreation, or commercial activity

In practical terms, this captures a substantial portion of residential and commercial property stock across the country. Any apartment block with tenants, any commercial office above ground floor, any school, clinic, hotel, or place of worship falls within scope. If you own or manage property in any of these categories, the obligation applies to you.

The Penalties

The consequences of non-compliance have been significantly increased under NIIRA 2025:

The greater financial risk is not the fine itself, It is what happens when an inadequately structured policy is called upon to pay a claim.

The Underinsurance Risk

Purchasing a policy is not the same as being correctly insured. Under NIIRA 2025, the sum assured must reflect the property’s certified reinstatement value, which is the actual cost to rebuild from scratch at current construction rates, as well as its open market value and applicable depreciation.

Lagos construction costs have risen sharply over recent years. A building insured against cost estimates from even two or three years ago is almost certainly underinsured today. When a claim arises due to fire, structural failure, or flood damage, the insurer settles against the insured sum and not the actual rebuild cost. The shortfall falls entirely on the owner.

Insurers operating under NIIRA 2025 require a certified valuation report from a registered Estate Surveyor and Valuer before issuing a compliant policy. This report is the foundation of a policy that will respond correctly when it is needed.

What a Compliant Valuation Covers

A NIIRA 2025-compliant valuation addresses three things:

• Reinstatement Cost Assessment: The current cost to rebuild the property to its existing specification
• Open Market Valuation: The property’s value in the prevailing Lagos market
• Depreciation Schedule: A structured account of physical and functional depreciation

The report is prepared and certified by a registered Estate Surveyor and Valuer and meets the requirements of NAICOM and participating insurers.

For higher-value or structurally complex properties, a Risk Intelligence Assessment provides additional depth. It covers flood exposure, structural risk, and regulatory compliance gaps, and informs both insurance pricing and longer-term investment decisions.

Next Steps

If your property falls within the scope of NIIRA 2025, the immediate priority is to commission a professional valuation before placing or renewing your insurance cover.

To arrange a valuation assessment, please speak to your CW advisor or contact us directly by calling +234 704 819 4242, or email hello@cwlagos.com.

For more insights about top neighborhoods for real estate investments, check out https://cwlagos.com/why-are-ikoyi-vi-the-top-real-estate-spots-in-lagos/

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