Home Insurance: Residing in an earthquake, cyclone-prone area? Get your home insured right now

Published: June 19, 2020 3:02 PM

Apart from providing cover against natural calamities, a home insurance policy even covers your home against damages due to burglary, fire and allied perils, and equipment breakdown.

Home Insurance, earthquake, cyclone, Delhi earthquake, Cyclone Amphan, comprehensive home insurance, structure, contents, Home Insurance Claim, natural disastersThe whole idea of buying home insurance is for securing your finances at the time of calamities.

While India continues to fight the deadly coronavirus epidemic each day, a string of low-intensity earthquakes have jolted the entire country since April. For the fear they strike, earthquakes are remarkably frequent in India and the nation records dozens of them every year across different parts of the country. While the majority of them cause insignificant damage, given their unpredictability and destructive potential, the risks can never be ruled out, especially for parts of India, including Delhi, that sits in fourth-highest risk zone in India, making it vulnerable to earthquakes. And it’s just not about Delhi and its surrounding areas!

According to a report by the National Disaster Management Authority, 59 per cent of India’s area is vulnerable to moderate to major earthquakes and the country is divided into four seismic zones — II, III, IV and V — that signify an increasing order of intensity and frequency of occurrences of earthquakes.

Need for Home Insurance

Be it earthquakes or the recent powerful storm, Cyclone Amphan, that claimed a total loss of over $20 billion, every natural disaster leaves behind a massive trail of huge destruction to life and property. Unfortunately, the frequency of natural disasters in India has increased drastically in the last one decade and the losses from the natural calamities are said to have reached over billions of dollars. As per a recent World Bank estimate, one-third of India’s over 600 districts are hazard-prone, directly placing about half the nation’s economy potentially at great risk. Much more than the economy, it’s the properties worth millions and the lives of people which remain at utter stake.

While the government does its best to provide economic help to the people after any natural calamity, a proper financial planning certainly lowers the financial burden. A key learning for people would be to get their home and property insured. In order to protect your property from a financial loss during a natural calamity, it is best to buy home insurance. It is important, we see home insurance as a very valuable product. Moreover, there are numerous insurance companies operating in the market that offer policies to cover your home against all natural calamities.

What all is Covered

Under a comprehensive home insurance policy, though the insurer will not pay you for the regular wear and tear of your house, it will certainly pay you for any damage caused by natural calamity including flood, earthquake, cyclone, etc. With the weather patterns becoming significantly unpredictable, it is smart to get an adequate cover for your house. Do remember, it is not just important to have a policy for the structure, but it is equally important to have adequate insurance for contents of the house as well, including T.V, furniture, fixtures, electrical and mechanical appliances.

Apart from providing cover against natural calamities, a home insurance policy even covers your home against damages due to burglary, fire and allied perils, and equipment breakdown. Many policies even provide cover against acts of terrorism. The whole idea of buying home insurance is for securing your finances at the time of calamities. You can buy home insurance for one or more years and long-term policies are also advised while buying home insurance. For structure only, you can buy home insurance for 1 to 30 years, for structure and content, policy can be bought for 1 to 5 years and for content only, policy can be bought for 1 to 5 years.

Buying Trends

As per the industry trends, queries related to home insurance have increased by 2.5x in the last four weeks while the sale of home insurance has gone up by 2x in the same time line. Most of the people buying home insurance in the last 4 weeks are from metro cities, including Delhi, Mumbai, Kolkata, Chennai, Bangalore, etc. A majority of these cities in the last 1 month have either witnessed a massive cyclone or earthquake which has compelled them to think about buying a home insurance policy to secure their property against natural calamities.

Filing a Home Insurance Claim

In order to register a claim for home insurance, there are different steps to be taken as soon as a claim event is triggered. The first and foremost thing to do is notify the insurer immediately over phone, written intimation or email. Within 14 days thereafter, you need to put together a detailed explanation along with the evidence of the losses incurred. In case of a theft or burglary, you are required to lodge a complaint with the Police and take all practicable steps to apprehend the guilty person or persons and to recover the property lost. It is also important to provide any/all necessary documentation you can procure like plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, proofs and information with respect to the claim. As and when required, the insurance company will appoint surveyors/investigators.

(By Tarun Mathur, CBO, Policybazaar.com)

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