Kerala floods bring back memories of Chennai 2015 for insurers, Rs 450cr worth claims estimated

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26 Aug, 2025 12:21

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It was December 2015 in Chennai. Within a matter of days, 420 people were dead, several homes and vehicles completely destroyed.

Just three years later, Kerala throws a similar picture. About 370 lives have been lost in Kerala. On one hand, insurance claims are piling up and on the other, it is a struggle to reach the insured.

State-owned insurers, including Life Insurance Corporation of India (LIC) and several other PSU insurers, have been asked to settle claims instantly by the government. However, industry sources told Moneycontrol that the insurance claims received are still very few and far in between.

Initial estimates

According to sources, the insurance industry's initial estimates for claims are around Rs 450 crore. A majority of it will be motor insurance, home insurance and life insurance.

The chief of a mid-size private life insurer said they would simplify all the processes, but the biggest issues is to gauge whether an individual has a policy.

"We have received a few hundred death claims but not all the data has been digitised. So we need to first ascertain whether the person had a policy and if it was in force," said the head of claims at a private life insurer.

For home insurance, the struggles will be much higher. Home insurance will cover structure of the house and its contents. Due to all documents being lost, insurance companies are trying to ascertain how to verify the claims filed.

Health insurance claims

For health insurance claims, most diseases will be water-borne. Insurers said the biggest hurdle is to offer hospitalisation facilities. There have been pregnant women who are entitled to cashless claims, but have not been able to reach hospitals due to connectivity being cut off.

"We are also in a fix because only a handful of hospitals are operational and not all of them are in the network. Policy wordings mandate that certain covers will be triggered only if hospitalisation occurs," said the head of underwriting at a state-owned general insurer.

Extent of damage

During the Chennai floods, the most common claims in motor insurance were related to the engine getting submerged in water. This will be the case with Kerala as well.

"There are specific motor covers related to engine protection. Since all data is available digitally, the insurance details can be easily retrieved. However, for large-scale claims, there will be immediate surveys done," said the claims head of a large general insurer.

Some insurers like ICICI Lombard General Insurance are making outbound calls to their customers, to check on their safety and also provide them with support on claims that they wish to intimate.

Furthermore, for motor customers, the company is also directly coordinating with motor vehicle manufacturers to reach out to the customers, to ensure quick and smooth claims processing.