With visuals of the recent floods in the state of Assam, landslides and flash floods in Uttarakhand and Kerala reiterating the devastating impact of nature’s fury. Unprecedented rainfall leaves behind a trail of destroyed homes and displaced lives every year in various parts of India. In fact, with around 12% of India’s geographical area being prone to floods, economic losses due to floods reached $2.3 billion in 2021 as per Swiss SIGMA Natural Catastrophe Report, it can prove highly costly for homeowners living in flood-prone areas. While there is not much one can do to avoid such damage, homeowners should at least safeguard themselves with home insurance policies against the financial risks brought upon by flooding.
Considered to be the most valuable asset by most families, having a home insurance policy can bring great relief specially to those living in natural disaster-prone areas by ensuring financial protection against any damage. Majority of non-life general insurers provide home insurance plans that can indemnify the insured for nearly all losses arising out of natural and man-made disasters including flood and storm. Coverage for flood is available in both the policies i.e. Bharat Griha Raksha (BGR) policy or Householder’s Package policy. Both the policies financially protect the homeowners, of be an apartment or a bungalow, from losses arising due to physical damage to structures and contents caused by flood, cyclone, storm, etc. It is important to note that damage caused by overflowing of rivers and lakes will be covered in both types of policies.
Paying a small premium amount to protect one’s home against any damage, including flood related damage, is a very small price to pay to ensure peace of mind. A basic home insurance is very affordable with the insurance premium ranging around Rs. 5 to 7 per day for an insurable value of Rs. 20 lakhs p.a. And since a package policy offers a bouquet of covers against natural and man-made events, the premium is slightly higher in comparison with a basic policy. However, the premium per annum can reduce even further for both policies if the policyowners opt for long-term (2-year or 3-year) policy tenure, making them eligible for a discount.
In the event of making a claim, all that a policyholder needs to ensure is that claim intimation is raised to the insurer promptly and correct documents are submitted to the insurers.
Damage to one’s beloved home can cause tremendous mental as well as financial distress. But homeowners can minimize such distress by safeguarding their homes with home insurance policy that is not only the most convenient way of ensuring protection but also the most economical one.
Rakesh Jain is CEO of Reliance General Insurance.