Recently, my friends and I, with our families, went out for a long weekend in Alibag. And, though we enjoyed the serenity, we were caught up in the telecast of the devastating Chennai rains. The visuals showed floating electronic devices, building walls collapsing under the water pressure and residents crying out for help.
While we were glued to news channels, our friend, who owned the bungalow we were staying in, started thinking about how a tsunami or earthquake could damage his property, especially as it was close to the beach. It had been his dream to have a weekend bungalow and he had saved every penny to buy it. He had also decorated it with old artifacts. The idea of losing his bungalow kept him tense throughout our holiday. Some of us owned luxurious shops and commercial establishments in the city and these were susceptible too, we thought. It was then that we realised how an insurance cover could ease the burden.
According to a recent United Nations global assessment report on disaster risk reduction, India ranks third in a list of countries that were hit by most natural disasters in the past two decades. Such alarming facts should compel us to opt for an insurance cover that protects property (residential and commercial) from the financial impact of such uncontrollable events.
Household content insurance—Covers damages to the building and household contents because of fire, leakage from an automatic water sprinkler, explosion, storm, earthquake or an act of terrorism.
Burglary and theft—Covers contents of the house against loss or damage because of any unforeseen and unauthorised entry into the insured premises by anti-social elements with the intention to steal goods.
Jewellery and valuables—Covers jewellery and expensive valuables, up to a certain amount of the sum insured, subject to the policy.
Reinstatement charges—If the property is completely lost, its reconstruction would be covered based on reinstatement value and not the market value of the land. Reinstatement value is the cost of rebuilding the property.
Individuals who have set up their own business establishments and have shops should opt for a shopkeepers policy. There are several perils, other than floods and earthquakes, that commercial establishments are prone to.
Loss of money—this cover is applicable to money lost or robbed in the shop or in transit.
Neon signs—The shopkeepers policy covers loss or damage to glass/neon signboards because of external means.
Breakdown of business equipment—Equipment such as air conditioners and freezers, which are fixed on the premises and are solely used for business purpose, are covered under this feature.
With a plethora of insurance covers and features available to minimise the financial loss arising from natural disasters and anti-social activities, opting for a home insurance and shopkeepers policy would definitely help you bring back stability. It is always prudent to read the policy carefully while opting for a cover.
Kumar is head, corporate planning, product development, customer service and operations, Universal Sompo General Insurance Company Limited.
