In the last couple of years, various states across India experienced an unexpectedly large downpour causing water from rivers to spill into towns and villages, destroying lives and property. The unusual rain was not expected by the residents of these areas, causing more damage than it should have.
During the 2005 floods in Chennai, 90 percent of the properties were uninsured. A similar pattern was observed in Kerala which experienced devastating floods in 2018 teaching us that a natural disaster of such scale could leave behind long term damages even in the unexpected parts of the state.
Floods, cyclones or any kind of natural disaster can strike at any time. While some of us my opt for home insurance, we often tend to not check if the insurance covers natural disasters (also called "acts of God"). Most properties only cover man-made incidents like fire or theft.
It is also observed that one does not opt for a home insurance with coverage for natural disasters because the area hasn't been historically affected by it. Depending on the geographical landform (plain, plateau or mountains), your area could be prone a number of "acts of God," like floods, landslides, lightning strikes, forest fires, etc, if not massive disasters like earthquakes.
You cannot predict all the unforeseen events but shielding your homes to the most closest of the possible disaster will soften the blow of the damage the aftermath of the event leaves.
Possible increase in premiums
In the last five years, there have been a number of rain-related calamities seen in the states of Assam, Kerala, Karnataka, Maharashtra, Bihar, Odisha, among others.
Previous experiences have insurance companies anticipating a larger than before number of claims.
The higher number of claims will mean increased cost of these companies, which brings us to a possible increase in premiums covering properties and vehicles from such events in the near future.
Further, as a principle rule, those that have made previous claims of insurance (any kind) are treated as being at higher risk of returning to make another claim and are therefore charged with a higher premium.
Do you need structure coverage?
If you live in a city, you are more likely to live in an apartment. These housing societies usually insure the building and flat owners do not need to purchase an insurance for the structure but just insure any valuable contents inside the flat. Make sure the insurance for the contents of the house covers repair costs.
If you live in an independent house structure, you need to get the whole house insured-both the structure and the contents.
You are required to take precautions as per the law
IMD (India Meteorological Department) had warned of the occurrence of Cyclone Fani, this year, following which insurance companies informed their customers of ways to protect their assets like cars or the house.
After the calamity, the insurance investigators will look for a way to reject your claim and by not taking precautions, you will give them a reason as the insurance law requires the asset owner to take steps to protect what the have insured.
After a calamity, it is highly unlikely that you will be able to recover insurance papers that you store inside your own house or car.
Ideally, a bank locker is the safest place to store all your important documents. You can also save these digitally in your online drive or over e-mail.