Car and home insurance covers can help you cut the losses due to the damage caused by a natural calamity.
The landslides and flash floods in Uttarakhand and Kerala, which have killed more than 80 people and injured several, have also led to widespread damage and loss of property and assets of the locals. While there’s not much you can do to avoid such damage, you can at least cut the losses by taking an insurance cover for your home and assets like cars well in time.
India is a tropical country with high frequency of rains, resulting in frequent floods, landslides, and cyclones in many parts of the country. In addition to the danger that these natural calamities pose to human life, they often result in loss of property and personal belongings.
Home insurance
“While humans have little control over natural calamities, buying a comprehensive property insurance policy can help with ensuring protection against damages caused by floods, earthquakes, and burglaries. Paying a fixed premium towards one’s property, especially for individuals who live in areas prone to natural disasters, can bring relief and provide a financial cushion, should an unfortunate event take place,” says Adarsh Agarwal, appointed actuary, Go Digit General Insurance.
He says that property insurance acts as an umbrella plan, offering a combination of covers under a single policy. In addition to just covering the risk of property damage from defined reasons or perils, such plans could also cover the contents of the property and, in some cases, the personal liabilities of the policyholder, depending on the add-ons chosen.
Property insurance, typically, covers damages arising out of fire, lightning, floods, cyclones and so on. However, they may not cover damages arising out of wars, nuclear risk etc. One policy can differ from another based on the inclusions and exclusions.
“Most people realize the importance of home insurance only after facing sudden losses. Therefore, having a good property insurance cover is advisable as it offers adequate financial cover at reasonable expense,” says Agarwal.
Most insurers charge a premium based on the sum insured which is derived based on the property’s value. Property insurance is, typically, not very expensive.
Car insurance
Car insurance protects the car owner from financial losses which may occur due to an unfortunate event involving the car. Depending on the scope of the coverage, there are three types of car insurance policies—third-party, standalone own-damage (OD), and comprehensive cover.
Out of these, the own-damage and comprehensive plans cover damages caused by floods. A standalone own-damage car insurance specifically covers your car’s damages and losses caused due to accidents and collisions, natural calamities, fire, and thefts.
A comprehensive car insurance offers coverage for damage incurred to the car either due to an accident, theft or certain natural calamities such as floods. A comprehensive plan also covers third-party property or vehicle damage. It also includes add-on covers such as zero depreciation cover, engine protection and passenger cover.
“A comprehensive motor insurance policy covers damages caused by floods. However, buying an ‘engine protection add-on is important to ensure any loss caused to the engine and its parts are covered,” says Agarwal.
Insurance policies act as a shield against unexpected mishaps or events. So don’t want for an event to happen before buying a cover.