Get pragmatic and buy a cover

Written by Suneeti Ahuja | Updated: Nov 17 2008, 18:53pm hrs
While superstition prevents people from thinking of untoward events happening during auspicious events such as weddings, financial commonsense dictates that you buy insurance cover, especially if you are spending a lot of money on the event.

Even though the Vermas* initially frowned at the idea of getting a wedding insurance cover for their sons wedding, later they thanked their wedding planners Genie Events and PR for persuading them to buy one. Caught unawares on the day of the reception party in the pink city of Jaipur, the family, instead of greeting their guests at the party venue, met a few of them in the hospital following the stampede at the Chamunda Devi temple.

The reception party was a gala affair with an approximate budget of Rs 75 lakh. But with some relatives wounded in the stampede, the Vermas decided to postpone the reception by a day. The postponement would have cost them a substantial monetary loss, but thanks to the insurance cover they incurred no loss. The reception party was held the next day without any mishaps. We had to postpone the reception party for one day. This led to extra costs such as additional rent for the venue and extra payment to the caterers, the lightwalas and the flower decorators. But everything was taken care of because of the insurance cover. In the end we did not incur any loss, says wedding planner Charu Kataria, spokesperson for Genie Events and PR.

Although a wedding insurance cover is the best solution to take care of any untoward event, it usually does not figure on the to-do list of most families. Such plans are still in the nascent stage due to low awareness. And given the sacred nature of these events, nobody wants to discuss or even think negatively in their context. But as the spending on weddings becomes higher it makes sense to buy a cover. We feel that wherever financial risk is high, insurance is the best option for covering the loss, says T.A. Ramalingam, head of underwriting, Bajaj Allianz General Insurance.

Whats available
The wedding insurance policy covers all events related to the wedding ceremony. Ideally, the policy should be bought 10 to 15 days before the event.

At present, only two insurers offer wedding insurance policies: Bajaj Allianz General Insurance and ICICI Lombard General Insurance. While Bajaj Allianz has a comprehensive wedding insurance policy, ICICI Lombard offers it under event insurance.

Both these polices cover monetary losses incurred due to cancellation or postponement of wedding; fire and allied perils; accident to bride or groom or to blood relatives resulting in hospitalisation within seven days prior to the printed or declared wedding date; damage to property; money in safe; burglary; and public liability that covers food poisoning, accidents at the venue or damage to the venue. Under wedding cancellation or postponement, the policy also covers non-refundable expenses like printing of cards, and advances paid to caterers and to the venue owner.

If the wedding date has to be postponed you are likely to incur a lot of expenditure. This can mean re-printing of cards, cancellation of any means of transportation that you may have already paid advances for, and so on. A wedding insurance plan takes care of all such expenditures, says Amar Pandit, a Mumbai-based financial planner.

Bajaj Allianzs plan. It offers four options with the sum insured ranging from Rs 20 lakh to Rs 80 lakh. Further, each policy is divided into various sub-categories with set limits. A policy with a sum insured of Rs 20 lakh will cost you Rs 2,250. This cover comes with a pre-determined limit of Rs 2 lakh each for wedding cancellation or postponement, damage to property, personal accident, money in safe, and burglary of jewellery, precious metals and stones, appliances given by blood relatives and in-laws, and Rs 10 lakh for public liability.

Remember that to get hassle-free claims, one needs to keep a record of all the valuation certificates and bills. And unlike a regular public liability policy, which can be invoked under any circumstance, this one can only be invoked against a liability related to the wedding.

ICICI Lombards plan. ICICI Lombard offers wedding insurance as a part of its event insurance policy. Its event insurance policy provides coverage against cancellation of event (wedding) due to unforeseen perils. For instance, if the marriage hall gets flooded or if an earthquake occurs, the cost of the wedding is reimbursed.

The policy also takes care of any material damage caused to the property, such as to the stage, sets, seats and wardrobe due to fire. It also takes care of public liability. Unlike in the case of Bajaj Allianzs policy, where there are various options of sum insured to choose from, ICICI Lombard does not have any set values (of sum insured).

The variation in rates (sum assured) depends on evaluation of individual risk of the location, venue, whether it is outdoors or indoors, type of decoration, number of days and programmes covered, and number of guests invited, says Rajive Kumaraswami, head of reinsurance and financial institutions group, ICICI Lombard.

The premium, usually, is 1.5 per cent of the sum assured of the total policy.

Other options
Besides these wedding insurance plans, a person can also opt for standalone covers from general insurance companies. You can buy standalone fire, burglary and personal accident polices. Explains Pandit: Check if the hall or the farmhouse where the wedding is taking place is insured. If it is, then why do you need a separate cover In such a case, you can look for standalone covers that suffice for your needs.

Further, says Pandit: Read the policy carefully and see if it makes sense for you. Only if it does should you go for it.

Moreover, if the wedding is taking place in the family house and the owner has a household policy that covers burglary, public liability and fire, customised policies become redundant.

Points to remember
The first and foremost thing to take care of is the bills. Unavailability of bills at the right time can cause hassles in getting claims furnished. Comprehensive wedding insurance policies are better. The process in case of several standalone policies can be tiresome. It is very important to have all the bills in place. I think it is best to hire a wedding planner who gives a consolidated bill, says Avaneesh Nirjar, chief investment officer, PolicyBazaar.com.

Also take a close look at the exclusions and deductibles. Most policies have co-payment clauses, wherein the insured has to bear a part of the initial cost. Under fire insurance, Rs 10,000 has to be borne by the insured; under third-party liability, Rs 50,000 has to be borne by the insured. Only under personal accident there are no deductibles, says Rahul Aggarwal, chief executive officer, Optima Insurance Brokers.

While superstition prevents people from thinking about an untoward incident during so auspicious an occasion as a wedding, buying an insurance cover helps take care of monetary losses, if something happens. Families in India bet almost their whole lifes savings on weddings. And if something unfortunate were to happen, it is likely that the family wont be left with sufficient money to arrange another wedding or event. So people should think in financial terms and not in emotional terms, and buy wedding insurance, says Aggarwal.

Next time there is a wedding in your family, make sure you buy insurance.