NEW DELHI: Now that the catastrophic phase is over and the water level has receded, it is rehabilitation time for Kerala. All the people who got impacted are now ascertaining the quantum of loss they suffered and have started applying for compensation insurance companies.
However, it is unlikely that loss bearers will get equal monetary support to start afresh as only a handful of them were insured. The economic loss of the flood is pegged at Rs 20,000 crore, while insured losses are only Rs 1,000 crore (till now) meaning the rest of the losses will have to be borne by the state. There is least doubt that the government has the best of the intentions to provide economic help to people, but a proper financial planning would have lowered the financial burden they are likely to face. One of the key learning for people, especially who lives in natural disaster-prone areas from the recent flood would be to insure their homes.
Call it negligence or lack of awareness, people in India do not value the home insurance category as much as motor vehicle insurance or health insurance despite buying expensive homes at high-interest rates. As per data available, less than 1 per cent of people who can afford home insurance actually buy the cover.
This is a surprising trend as India is disaster-prone. Nearly 30 per cent of Indian landmass is prone to earthquakes with severe intensity, while another 27 per cent is prone to moderate earthquakes.
Roughly 12 per cent of India is prone to floods and 76 per cent of the coastline is prone to tsunamis and cyclones.
Experts say that people in India does not see it as a valuable product even though the premium to cover a house worth Rs 50 lakh is less than Rs 2,000. “Post the floods in Tamil Nadu last year, there was a sudden increase in home cover products but that does not translated into product sales,” said an executive of a general insurance firm. Data available said that the economic losses from the Chennai floods were to the tune of Rs 15,000 crore, but the insured losses stood at only Rs 4,800 crore.
According to him, a push is needed from government and insurance firms to increase it’s intake. “The government can provide tax perks similar to health insurance, remove GST or even make it mandatory on the lines of motor third-party cover whereas the insurance firms needs to market the product more aggressively. This will help build awareness and push the demand for the product,” he said.
What will it cover?
In India, home insurance against natural calamities does not come as a standalone policy, but is offered as a built-in coverage with home insurance policies. Most of the policies offer natural disaster insurance coverage against earthquakes, lightning, flood, cyclones, landslides, tornadoes, fire, falling trees and explosions. Almost all the leading players such as ICICI Lombard, HDFC, SBI etc offer home cover products.
5 important car insurance add-ons
Return to Invoice
This add-on is a saviour if the vehicle is declared unfit for further repairs and usage.
Engine Protection
This helps car owners overcome the damage to their car’s engine due to water ingression.
Nil Depreciation
This offers complete coverage without factoring in depreciation in loss of claim amount.
Consumable expenses
It covers cost of consumable items of your car like washer, lubricant, clips, A/C gas etc.
Roadside assistance
It takes care of the emergency towing, when your car is damaged or broken down and cannot move.