How home and car insurance can protect you against natural disasters3 min read . Updated: 21 May 2020, 03:06 PM IST
- 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 insurance.
- Home insurance policy will compensate you for damages caused to the structure of your house due to the cyclone and flooding.
Cyclone Amphan made landfall in India on Wednesday, causing torrential rains and wind speeds of around 155-165 Kmph. The storm caused massive damage in Odisha and West Bengal. According to the West Bengal government, the impact of Amphan was worse than the coronavirus pandemic, and damages in the state from the cyclone alone could amount to around ₹1 trillion.
Many buildings and vehicles were damaged or destroyed due to the cyclone, and in the wake of the storm, the resultant flooding is causing even more damage. When a natural disaster like this 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 in the next week or so," said Ankit Agrawal, co-founder and CEO, InsuranceDekho. Here’s what your insurance policy can help you recover.
Motor insurance: A video recorded at a housing complex in Kolkata shows 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 like this can cause to your car: The exterior or interior of the car being damaged; and the engine is damaged. While the former can be recouped easily from the own-damage insurance part of your cover, damage to the engine can be tricky as they are expensive to repair. 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 insurance, 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 insurer 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.
Home insurance: Any natural calamity, like an earthquake, a flood or a storm can cause damage to property. "There are two types of property or home insurance policies: a basic fire insurance policy and a bundled or comprehensive policy, or householder’s package," said Agrawal. The former covers your house against fire, lightning, storm and flooding. Some insurers offer the cover for earthquakes as add-on, because the premiums can vary according to the geographical zone your house is located in.
The latter, HPP, adds more options to the basic insurance 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 cover, which offers an income stream for the period you are unable to work due to a temporary or permanent disability caused by an accident. Either cover would compensate you for damages caused to the structure of your home due to the cyclone and flooding.
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 a personal accident cover can offer additional protection, because there is no telling how much destruction an earthquake or a storm will cause. 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.