Moneycontrol
Jan 13, 2016 09:02 PM IST | Source: Moneycontrol.com

Home insurance: Your saviour in times of natural disaster

Natural disasters like floods in Chennai, make many home owners worry about their homes and belongings. Home insurance can come of their rescue.

Home insurance: Your saviour in times of natural disaster
Saroj Satapathy
Ideal Insurance

Nature is unpredictable and more so with change in weather pattern that we see presently all across the world. It is human nature to seek protection the moment he sees someone else is in trouble and forgets the same even faster! Similarly, the present day natural or so called man-made disaster of huge magnitude has opened the debate of covering property and life and the cost involved in buying the same or facing the disaster in absence of any cover. The utter urgency in understanding the same fizzles out on account of less of understanding the product, its coverage and application and the ever dreaded factor of comparing the present cost without realising the accrual future benefit as and when the disaster strike without any warning and limit of destruction.

The recent flooding/inundation at Chennai was caused by torrential rain over four weeks in October and early November possibly caused more panic in city and its surrounding by artificial flood like situation which most of the town folks would never have come across. We may call it natural disaster or name it in whichever way we believe but it has left many thousands with losses by way of flood water entering their houses damaging property, furniture, fixtures, fittings, contents and so on and so forth. It is essential to have both buildings and contents insurance to provide financial cover if your place of residence gets affected by flood/inundation. It doesn't matter whether you are a tenant or a house owner, whether you live in a one-bedroom, flat or independent house, the need to have right protection for your property against such unforeseen losses is absolutely essential to say the least. Do recollect the TV broadcast of recent past where double storied houses were under water with all contents of the house floating! Think for a moment what happens after the water recedes. All contents including the furniture, fixtures and fittings will be thrown out after they were under contaminated water for 6-7 days. Who pays for such huge losses and how can someone think of replacing the entire property lost which has been acquired slowly over a period of time, overnight!

In Indian insurance market, one can buy two types of insurance for the household, that is for the building and its content. Buildings insurance covers the structure of your home which will also include the boundary wall (if independent home) its fixtures, windows, fittings etc fitted in your kitchen or bathroom suite. Building belonging to you can be covered against fire and allied perils including storm, tempest, flood and inundation popularly known as STFI. Similarly, the contents of the house including all white goods and others can be covered similarly as above. A casual walk around your house and a stock taking will surprise you as regards the sheer quantum of money lying around in terms of content and the losses you will suffer if you are exposed to a Chennai like situation tomorrow!!

The most crucial factor is that in India home insurance is cheap and comes with other add-ons. Most of the insurance companies offer such a coverage and you can actually seek additional coverage as well. A simple advice is to prepare a list of items of your home, mention the value and offer the same to an insurance company to suggest the premium payable and cover the property against fire and allied perils, act of God perils including natural disaster and social perils like riot, strike and act of terrorism. Further, it can also cover burglary & theft, mechanical and electrical breakdown of domestic appliances, baggage insurance and host of others. In case you are covered and disaster strike, don't panic and contact your insurer/intermediary, take photographs, if possible and not remove property before inspection by the insurer to assess the loss.

It is very disheartening that while the losses estimate by government stands at few thousand crore yet the property insured and recoverable may stand at a meagre 5 to 10% at the most. This colossal national loss can only come down with better management of your insurance. Home insurance is probably the cheapest insurance available in Indian market today and I strongly believe that people should insure and stay happily rather than to seek 'relief' and 'subsidy' from Government to rebuild their life on account of a natural disaster. Do contact your advisor/intermediary or visit official web sites of insurance companies to learn more on 'Home' insurance, if you have not yet. Better late than never...
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