Terrorist attacks can happen anywhere including big cities as they mostly target areas with large gatherings. Customers may approach insurance companies for covering large scale events or gathering. Insurance companies issue cover only after assessing the risk involved.
With tension between India-Pakistan hotting up after the recent Uri attack, terror threat across country is looming large. With the advent of the festive season, threats of terrorist attacks are likely to get heightened.
Against this background, is it wise to take terror covers for life and property? If so, who should be the ones to purchase such insurance? What all should be covered and under what circumstances? FeMoney posed these questions to some leading insurance experts to pick their mind on the issue. The common view is that obtaining terror covers for vulnerable areas and event during the fesitve season would be a good idea at this this point.
“Terrorist attacks can happen anywhere including big cities as they mostly target areas with large gatherings. Customers may approach insurance companies for covering large scale events or gathering. Insurance companies issue cover only after assessing the risk involved,” Neeraj Gupta, Associate Director, PolicyBazaar.com said.
If you are looking to insure your property, ideally you need to insure those installations that are located close to commercial business centres, airports, railway stations, educational institutes, sports stadiums, hotels, tourist places, places of historical importance, landmarks, industries like energy & power, have a higher risk of a terror attack and hence are advised to not avoid terrorism covers.
Mahavir Chopra, Director – Health, Life and Strategic Initiatives, Coverfox.com says one should consider buying terror add-on insurance since costs could be negligible. “Terrorism is covered under most life insurance and accidental disability insurance policies. You can cover terrorism by opting for an add-on cover in your existing property insurance. The cost of terrorism add-on being negligible, it is advisable that all go for this cover as default,” Chopra told FeMoney.
On the extent of cover that one should avail, Atrey Bhardwaj, AVP-Business Operations & Partner Management, BankBazaar.com said it would depend on various factors. “The extent of cover should be based on the type of policy. In case of general insurance, the policy should be sufficient to cover any debts associated with business or residential property, the value of the property inside it, as well as the cost of rebuilding your home or business establishment. In case of a personal policy, it should cover any debts or liabilities the insurer may have, as well as provide for their family in their absence,” he said.
Bhardwaj said as a thumb rule, a minimum level of cover equivalent to 10 times your annual salary is a safe amount. “If you want cover nearer 15 or even 20 times your annual income if you have major outgoings such as a home loan or a large family to support. It is also good to have an additional critical illness cover in your life insurance for added security. Your health insurance, too, should provide sufficient cover for yourself keeping in mind the escalating costs of medical intervention,” he said.