Every year in November, a month considered auspicious, there is a record number of weddings in the country. In fact, there have been instances when around 40,000 wedding ceremonies have taken place in a single day in Delhi alone.
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Weddings are occasions that possibly need maximum planning and expenditure. An average urban mass affluent wedding costs at least Rs 25 lakh and could even go up to Rs 1 crore. And after putting that much effort and running from pillar to post to get everything in order, apart from spending that much money, you would definitely not want anything to go wrong on the final day.
Of course, the thought of associating a calamity or risk with such a happy occasion is not welcome and may even be considered inauspicious. But it may make sense to brace yourself against any untoward incident by spending a little extra and containing loss, if any. Buying an insurance to cover the wedding expenses will serve the purpose.
What’s on offer
There are about 22 insurance companies in the non-life sector and yet it is difficult to come by a customized wedding insurance policy. Explains T.A. Ramalingam, head (underwriting), Bajaj Allianz General Insurance Co. Ltd: “We have a customized wedding insurance policy but wedding insurance never really took off because people generally don’t like to think about risks on auspicious occasions. However, it is popular in the north because in the north weddings are lavish affairs.”
Since wedding insurance is still not popular in India, insurers do not offer a customized wedding insurance plan that you can compare and buy. Most insurers that cover the wedding expenses do so under their event insurance policy. Bajaj Allianz General Insurance was the first insurance company to offer a comprehensive wedding insurance cover but they now offer it as a variation to their event insurance plans.
Other insurers such as ICICI Lombard General Insurance Co. Ltd, Future Generali India Insurance Co. Ltd and state-run insurers, too, cover weddings by customizing their event insurance plan.
Says K.G. Krishnamoorthy Rao, managing director and chief executive officer, Future Generali: “We cover wedding under event insurance policy. The biggest risk of a wedding function just like any other event is cancellation or postponement due to unforeseen circumstances and we cover expenses that are non-refundable. Additionally, we also offer covers such as personal accident policy, fire insurance and cover against theft of valuables like jewellery.”
This policy typically comprises three basic covers: fire, personal accident and liability. It covers the insured against any monetary loss due to cancellation or postponement of the wedding or due to fire and allied perils; accident to the bride, groom or blood relatives; burglary (including jewellery); money loss and public liability.
Let’s assume the bridegroom meets with an accident and the wedding ceremony needs to be postponed. This policy will cover the bridegroom under its personal accident cover, which pays the sum insured in case of death, permanent total disability, permanent partial disability or temporary disability.
An accident may also mean postponement of the event in which case all irrecoverable expenses such as payment to the caterer, expenses incurred on wedding cards and advances given for the venue are covered.
Rajive Kumaraswami, head (risk and reinsurance), ICICI Lombard General Insurance gives another example: “In the event of cancellation of the wedding due to unforeseen perils like a flood or an earthquake, the irreversible cost of the wedding is reimbursed. Additionally, material damage to property such as stage, sets, seats and wardrobe due to fire is also covered and damage to property or lives of the guests are also covered under the public liability policy.”
Since it is an event-related cover, it kicks in about a week before the event takes place and may last till a couple of days after the function gets over. Explains Rao: “While cancellation is not a threat, theft or any natural calamity that may damage the contents of the house is a risk even after the function gets over.”
This policy is, typically, divided into sub-sections, each defining the scope of the cover. The sum insured for each sub-section is defined separately.
For instance, a Bajaj Allianz policy with a total sum insured of Rs 20 lakh has a predetermined cover of Rs 2 lakh each for cancellation of wedding, damage due to fire and similar perils, personal accident, money loss, and burglary, and a Rs 10 lakh cover for public liability. The premium is about Rs 2,250 for 7-10 days for this cover.
Do it yourself
You can cover wedding expenses by taking a combination of insurance policies on your own.
If you have a householder’s package policy and a personal accident policy, you can safely give wedding insurance a miss, especially if the wedding is taking place in the house. A comprehensive householder’s policy covers the house and its contents against fire and other natural perils; it also covers burglary and offers public liability, too.
Though stand-alone policies are available for shorter durations, insurers rarely offer them. Says Ramalingam: “A burglary insurance cover may cost as little as Rs 500, which is not a viable premium for us. Hence, for both the insurer and the insured, it is better to go for a bundled policy (wedding insurance).”
Also, a bundled wedding insurance means less hassle vis-a-vis stand-alone policies. Says Rao: “Since an event insurance policy comprises stand-alone covers like public liability, fire insurance and personal accident cover and are taken for shorter duration, the premium is less. As a thumb rule, the premium is rs 0.50-0.75 per Rs 100 sum insured.”
Things to watch out
Claims: You need to keep in mind that insurers reimburse costs that are valid and documented. This means that you would need to give valid bills of your valuables and of other arrangements that are covered under the policy. Considering that any extravaganza has a tendency to be carried out in cash, raising a claim could be a hassle. So, remember to keep all your bills intact.
Additional cost: To deter fraudulent claims, insurers put in place a provision that requires the policyholder to bear a portion of the claim amount. In insurance parlance, this cost is called “excesses” and it varies between 1% and 5% of the claim amount.
In India, weddings are as important an occasion for the families as it is for the bride and the groom. The time, effort and money spent on these makes it imperative that you take a cover for any associated risk.