Are You Insured Against Natural Disasters?

Are you and your family ready to face a natural disaster? Natural disasters are creating headlines very frequently in recent times, and there is no foreseeable relief in the near future. You cannot just escape them and the consequences that they bring with them! If we talk about India, insurance against natural disaster is not offered much significance due to lack of awareness. Still, as we observe incidents around the world and in our country, we understand the requirement of being insured. Insurance against natural calamities is not a single product but is included with home, auto, and business insurance.

What is covered?

These insurance policies protect against the following disasters:

  • Earthquake
  • Fire
  • Explosion
  • Lightning
  • Cyclone, flood, tornado, storms, hurricane, landslides, subsidence, and rockslides

Insurance protection against natural disasters

Although insurance companies claim that they create comprehensive policies that provide cover against all risks, it is necessary for you to sieve through the policy document and the items, which have been excluded and included.

If you find that something should have been included, you be supposed to discuss and get it incorporated. It might increase the premium value, except it will also ensure complete peace of mind.

Providers

Below mentioned are the insurance plans provided by the insurers and various items covered:

  • ICICI Lombard’s home insurance and motor insurance policy provides cover against all the above-mentioned disasters
  • HDFC Ergo’s home insurance, private car insurance, and standard fire and special perils policy gives cover against all the above-mentioned natural disasters and nature’s convulsions
  • Tata AIG’s Home Secure Supreme, Auto Secure, and Standard Fire and Special Perils provide cover against all the above-mentioned disasters
  • Bharti AXA’s SmartHome, SmartDrive, and Standard Fire and Special Perils give cover against all the above-mentioned disasters.
  • ICICI Lombard’s standard fire and special perils protects against fire lightning, strikes, riots, and terrorism

You might feel that these plans provide cover against almost every calamity, but that is not the case. People living in areas where earthquakes are more common might have to pay more than usual to protect their property/belongings. A common exclusion that you can find in every plan is that of damage caused by nuclear, radioactive explosives.

Just have an all-inclusive look at the fundamentals of the policies covered in case of natural disasters.

Insurance is life buoy for your life
photo credit: L’imaGiraphe / Flickr

Secure life

Unlike life and health insurance, which cover most or all events, personal accident insurance, provides compensation only in the event of disability, injuries or death caused due to accidental, external and visible events. The plan usually provides cover against accidental death, permanent disablement and temporary total or partial disablement.

Secure Family

It takes an entirely 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 natural disaster? A basic term life insurance cover makes sure that your family remains financially secure even in your absence.

This cover provides maximum coverage for the lowest premium, however does not give any returns in case you survive the term of the policy.

Secure property

Having your house insured is good for having some peace of mind especially if there is a rainstorm ravaging outside. People insure their houses in order to keep their households financially protected from any kinds of natural risks that might damage the property. Moreover, while most insurers think that their policies will ultimately cover just any type of natural disaster the real situation can be quite the opposite.

Below mentioned are the five types of natural perils that can hit hard both your house and your pocket regardless whether you have your house insured or not.

  1. Hurricanes
  2. Floods
  3. Fire
  4. Landslides and mudslides
  5. Earthquakes

This damage will be covered under a standard home insurance policy. Therefore, it would be better to have both if you live in an area with a risk of earthquakes.

If we talk about, householder’s package policy today, most insurance companies provide this, which addresses insurance needs of a householder by combining all requirements under a single policy.

It gives cover against fire and allied perils, including gas explosion in domestic appliances, lightening, bursting and overflowing of water tanks, apparatus or pipes, damage caused by riots, aircraft, terrorist act, earthquake, landslide and collision damage.

Apart from that, home insurance policy gives security against burglary and break-ins, breakdown of domestic appliances and personal accident.

In addition, it gives an optional cover like public liability, thus compensating the third party for the losses caused by the insurer.

Last but not the least, it also provides workmen’s compensation liability (to domestic servants engaged in insured’s premises).

Flood in Kolkata, India
photo credit: Nicolas Mirguet / Flickr

Things to keep in mind while buying any insurance policy for natural disaster:

  • Protection against natural calamity is important. You should take it but do your research on policies offered by various insurers. The difference in premium may be major.
  • In the inclusion and exclusion segments, if you think some items in the exclusion list but want that in your policy, just have a talk with your insurer and see if you can include by paying extra premium.
  • For example, your policy might state that your car is protected against damages caused by earthquake, fire, and landslide. Nevertheless, tsunami and flood may have been excluded. In this case, if your car is damaged in a sudden flood or tsunami, you cannot claim anything. Moreover, in the case of home insurance, document the belongings and take photos to be extra cautious in case you have to claim value for the belongings.
  • Everyone should take a protection rider against natural calamities because it strikes without any prior notice. Some amount of extra premium can help you stay insured and secure damage to your property.

In short, surviving a natural disaster is indeed a stressful situation. However, being patient and staying mentally strong will help you getting back to normal soon.