by Mr. M.
Ravichandran, Tata AIG General Insurance
All of us witnessed
what a massive disaster Hurricane Sandy was. There was severe damage to
property, life, vehicles & other assets and New York City came to a
standstill. Natural disasters strike without any forewarning.
Safeguard Against
Natural
Calamities..!
To safeguard yourself
& your family against like calamities, you should consider taking adequate
insurance against such perils. A recent study has revealed that even
governments can reduce their burden of loss arising out of catastrophes through
insurance.
Acts of God..!
Natural calamities
like as earthquake, flood, storm, cyclone (also known as ‘Acts of God’) can be
covered through property insurance policies. There are various policies which
cover such perils either as an inbuilt cover or / as an add-on cover.
The standard Fire and
Special Perils policy covers perils such as storm, tempest, flood, inundation
as an inbuilt cover, while earthquake can be covered as an add-on cover.
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| M. Ravichandran, Tata AIG |
Acts of God perils
usually attract higher deductibles vis a vis other normal perils, attributed to
potential of colossal damage which may result from occurrence of this sort of
peril.
What is covered..?
The cover is provided
up to the value of property in terms of reinstatement or / its replacement cost. There are consequential
loss policies which cover financial losses arising out of business interruption
consequent to such natural perils.
Premium rates depend
on many factors like physical location of the property insured, extent of
cover, nature of firm (whether Industrial / Non Industrial / Residential).
Premium rates also depend on the previous claims out in by the insured.
Generally, under
property insurance policies a compulsory deductible called ‘excess’ is
applicable which is mentioned in the policy document wherein a certain
percentage is deducted from the claim amount.
How to buy..?
It is vital to
conduct adequate research & also read the fine print in the policy document
before making a purchase.
If you find some
items in the exclusion list but want those in your policy, speak with your
insurer & see if you can include the same by paying an extra premium.
The natural perils
usually available as add-on cover are provided only if you opt for it by paying
additional premium.
In normal
circumstances, there is no waiting period for these covers but insurers could
impose restrictions on new policies once an alert on impending peril is issued.
Claims..!
The moment of truth
in insurance is when you register for a claim. It is mandatory to inform your
agent or / surer about the damage and the losses incurred.
As the first step,
you need to submit a claim in writing giving the details of damages, other insurances
on the same property and their estimated values within 15 days of the
occurrence of such loss.
A claim for loss by
catastrophes must satisfy certain conditions as mentioned in the policy
document.
The 2 recent
calamities that took place in New York & Chennai have been an eye-opener
for residents in these localities.
The adverse effects
of these calamities have highlighted an urgent need for the local residents to
take necessary steps to alleviate the risk of large losses, should a natural
disaster strike again.
The most effective
way to bring down the losses is to opt for an insurance cover, be it before the
disaster strikes, during a disaster or rehabilitation after a disaster.
The author Mr. M.
Ravichandran is President Insurance, Tata AIG General Insurance
Registered Office:
9th Floor, Piramal
Towers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai -
400 013
E mail: customersupport@tata-aig.com
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