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Residing in an earthquake, cyclone, flood-prone area? What can I do to ensure I save my losses?

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Published on April 20, 2021. EST READ TIME: 3 minutes

Did you know that there are several areas in India that are at high risk of natural disasters of any kind? Of the total land area that India has,

• 68% land area in the country is at the risk of drought

• 60% land area in the country is at the risk of earthquakes

• 12% land area in the country is at the risk of flood

• 8% land area in the country is at the risk of cyclones

In addition, India has extremely long coastlines that are vulnerable to tsunamis. All these are considered acts of God because people have no control over them. Despite significant advances in seismological and ecological studies, we have only been able to develop the ability to get a few minutes of advance warning at most. If you own property in India that is vulnerable to natural disasters, you must ensure that you have adequate property or home insurance for it.

Common home insurance inclusions provided by a policy

• Damages arising out of natural calamity: Natural calamities of various types can occur, causing damage to your home and its contents. If you live in a seismically sensitive area, you are prone to earthquakes. If you live on the coast, you are at high risk of cyclones, people who live near rivers are always at risk of flooding. Unless you have adequate home insurance, you will have to pay for your property’s repair and rebuilding out of your pocket. This can amount to lakhs, if not tens of lakhs of rupees. Home insurance will cover the cost of any damage caused by a natural disaster.

• Damages arising out of fire: Fire is the foundation of modern human civilisation, but it is also extremely dangerous. If it becomes uncontrollable, it has the potential to completely destroy everything. As a result, fire damage is a critical coverage provided by home insurance. Fire can be caused by a variety of factors, including electric fires, arson fires, gas leaks, etc. Your insurance company will cover the costs of repairing fire-damaged property. Because fire can completely destroy a home’s contents, they are also covered by a home insurance policy.

• Damages arising out of breakdown of electrical appliances: In order to make our lives easier, we rely on numerous electrical devices in our homes. In the summer, fans, coolers, and air conditioners keep us cool. Heaters and geysers meet our need for warm air and water during the winters. We are entertained and informed by television. Lighting is provided by bulbs and tubes. Washing machines, microwaves, and induction cook tops, make up nearly 90 per cent of household appliances. If any of these electrical devices fails for whatever reason, we will be severely inconvenienced. The home insurance policy covers you against any such problem caused by a faulty appliance or power outage.

• Damages arising out of manmade hazards:  A number of manmade hazards can endanger your home or property. These can include strikes, arson, terrorism, demolition or any other type of property damage act. Then there are the theft and robbery cases. Each of these can cause damage to your house and possessions that will cost you thousands of rupees to repair. Terrorism is another risk factor that you must protect your home. All of these risks are generally covered by home insurance policy.

• Accidental damage to your property: Most people spend a fortune to ensure that their house has only the best fittings and fixtures. Getting the most luxurious fittings in your home can completely transform the overall living experience. Consider the possibility that these are damaged during installation or due to some other problem. Heart breaking, isn’t it! Your home insurance policy will come to your rescue by allowing you to file a claim for any damage to your fittings and fixtures.

Keep in mind that home insurance may not cover risks like war, wilful misconduct, or any loss to a third party during your construction activities. Other policy exclusions may include standard wear and tear, the cost of the land on which the property is built, and any property that is under construction!

Conclusion

Keep in mind that standard insurance inclusions may not cover all kinds of risks to your home. It is best to read the policy document before purchasing and to buy add-ons to cover aspects that are not covered by the standard policy. You can buy add-ons such as coverage for valuables and jewellery, portable electronics, music or sports equipment in your home, and a pedal cycle you may be using for local commuting or exercise in your neighbourhood.