Are you prepared for natural disasters4 min read . Updated: 24 May 2020, 11:22 PM IST
- A natural disaster can turn your life upside down. Buying car and home policies can help you recover from an ‘act of God’ such as Cyclone Amphan
- Apart from home and motor insurance, life and personal accident covers can offer you additional protection
Cyclone Amphan, which made landfall in India last week, has caused massive damage in the states of Odisha and West Bengal and left many dead. According to the West Bengal government, the impact of Amphan could be worse than the covid-19 pandemic, and damages in the state from the cyclone alone could amount to around ₹1 trillion.
Amid torrential rains and wind speeds reaching up to 155-165 Kmph, many buildings and vehicles were damaged or destroyed due to the cyclone, and in the wake of the storm, the resultant flooding caused further damage. When a natural disaster like this one strikes, comprehensive home and motor insurance policies can come in handy to tackle the losses. “Unless something is specifically excluded in your policy, any damage will be covered to the extent of your sum insured. In the case of disasters like this, insurance companies set up helplines to fast track claims, and the regulator comes out with guidelines. We expect the guidelines to be announced soon," said Ankit Agrawal, co-founder and CEO, InsuranceDekho, an insurance web aggregator. Here’s what your insurance policies can help you recover.
A video recorded at a housing complex in Kolkata showed parked vehicles colliding with each other as the cyclonic winds hit them. Many cars have also been damaged due to trees falling on them and because of the flooding that followed the storm.
There are two kinds of damage that a disaster such as this can cause to your car: The exterior or interior of the car being damaged and the engine getting damaged. While losses from the former can be recouped easily from the own-damage insurance part of your cover, damage to the engine can be tricky as the repairs can be expensive. If your car is submerged due to flooding, don’t try to start it, because water getting into the engine can cause further damage, and this might not be covered by your policy, because catastrophes such as floods are covered by your car insurance policy, but any consequential loss is not.
If there are expensive add-ons and accessories in your car, like a GPS system or high-end stereo, declare it to your insurance company when buying a cover and pay the extra premium. This might seem an unnecessary outgo, but if your equipment suffers damage, it will make it a lot easier to get the insurance payout.
Any natural calamity, like an earthquake, a flood or a storm can cause damage to the property. In such scenarios, property insurance can protect you from paying out of your own pocket to get your home repaired. “There are different types of home insurance policies. With the exception of a situation where it can be established that there was wilful negligence on your part, resulting in the damage, based on the sub-limits mentioned in your policy document and the type of home insurance you have, all damages can be covered," said Agrawal.
There are two main kinds of property insurance: a basic fire insurance policy and a bundled or comprehensive policy, or householder’s package policy (HPP). The former covers your house against fire, lightning, storm and flooding. Some insurers offer the cover for earthquakes as an add-on, because the premiums can vary according to the geographical zone your house is located in. The HPP adds more options to the basic cover. It also secures your home and its contents against incidents such as burglary and electrical breakdowns. It also comes with optional covers such as personal accident, which offers an income stream for the period you are unable to work due to a temporary or permanent disability caused by an accident.
Both the basic cover and HPP will compensate you for damages caused to the structure of your home due to the cyclone and flooding.
Flooding is a good reminder that it is necessary to insure the contents of your home, as well as the structure. While structural damage can be expensive to repair, if your furniture and belongings are damaged by floodwater, insurance kicking in to compensate for it can be a huge relief.
Keep in mind that home insurance policies, typically, don’t cover loss or damage caused by wear and tear or depreciation over time, as well as any pre-existing damage. After a disaster, try not to handle damaged areas or items in your home too much. Take photos and videos of the damage, as these would come in handy when filing your claim.
A natural disaster can turn your life upside down and recovering from the damage can be an uphill task. “For those who don’t have the right insurance in place, it can take years to rebuild their homes and lives," said Agrawal.
Apart from home and motor insurance, life insurance and personal accident covers can offer additional protection. Having comprehensive insurance in place is the key to recovering from an “act of God" like Amphan, which can leave a trail of death and destruction in its path.