Home >Money >Personal-finance >Three insurance covers that can help you recover from a natural disaster

New Delhi: At least 17 people have been reported dead in Bihar and 77 injured after two high-intensity earthquakes hit Nepal. In the April 25 earthquake, at least 66 people died in the northern and eastern parts of India.

Several cases of house collapse and damages to property were reported. While the damages that such a natural calamity entails can rarely be measured just in terms of money, those who were careful enough to secure their financial future by having the relevant insurance covers in place may be feeling slightly better off.

Here are three insurance covers that can help you weather the storm in different ways, literally.

Home insurance

Any natural calamity, like an earthquake, flood or storm, usually damages the property. Usually people secure their homes and business establishments through a basic fire insurance policy that covers your house and its content against fire and other allied perils such as lightening, storms and floods. The cover against the calamity of earthquake is typically an add-on cover because the premiums for covering earthquake depend on the geographical zone the house falls in.

Another option is to go for a householder’s package policy (HPP) that adds more options to the basic fire insurance cover. So apart from dealing with natural perils, it would secure the house and its contents against burglary, damage and mechanical or electrical breakdowns. HPP also includes optional insurance covers such as public liability (compensates a third-party for losses caused by you), personal accident (offers an income stream for the period you are unable to work due to a temporary or permanent disability caused by an accident) and workmen’s compensation (covers you against injury or death of your domestic help).

Personal accident insurance

In a natural disaster like an earthquake or flood, the possibility of being seriously injured or disabled is quite high. While more than 250 people were injured in the 25 April earthquake in India, around 77 were hurt in the one that hit on 12 May.

A personal accident cover offers you a financial compensation if you meet with an accident that leaves you permanently or temporarily crippled. A personal accident policy has four covers: death, permanent disability, permanent partial disability and temporary total disability. For death or permanent disability, it pays you lump sum compensation, which is typically 100% of the sum insured. For permanent partial disability, it pays a portion of the sum insured and for temporary disability, it pays a weekly compensation usually up to 104 weeks. However, the weekly compensation is not much.

While the option of taking a personal accident policy is included in the householder’s package policy, you can also consider taking it separately after comparing the features being offered by the insurance companies you approach for the purpose.

Life insurance

It takes a completely unexpected natural disaster such as an earthquake or floods to change the financial contours of a family. What if you are the only earning member of your family and you become a victim of such a calamity? A basic term life insurance cover ensures that your family remains financially secure even in your absence. This cover provides maximum cover for the lowest premium, but doesn’t give any returns in case you survive the term of the policy.

So, are you well-prepared?

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