How Insurance Can Protect Your Assets Against Natural Calamities

Mini Balakrishnan

• September 1, 2024
• 8 min read
• Insurance

Natural calamities, in general, are unexpected events caused by nature itself including events like earthquakes, floods, cyclones, landslides, tornadoes, hurricanes, storms, etc. which have an impact on a lot of sufferings, deaths, and damages.

Unfortunately, mankind has mingled with nature in such a way that nature has started reacting in these ways including climate changes, global warming, etc which results in slow disaster. 

Protect Your Assets: The Importance of Home Insurance

Natural calamities can be a threat to your assets. They can occur to any assets you have like homes or the vehicles that you own which will be devastating enough to get you a breakdown and serious damage. Everyone will be keen to know if they can protect their assets from these unpredictable disasters. 

There are many insurance companies in India which give covers for Homes, cars, etc from natural disasters. The sad part is not all people are concerned about buying home insurance even though it’s very much affordable. People think nothing worse will happen to their assets and they don’t need an insurance cover for their houses against natural calamities. The fact says otherwise as India is a country that is prone to disasters.

A very basic home cover against natural disasters and man-made disasters included can give you benefits of Rs.50 lakhs coverage for a 1,500 sq. ft house. With paying as low as Rs.1,700 per year. The rates go up with the contents included inside the house. This is always subject to different insurance companies’ terms and conditions which might differ.

What’s Covered by Home Insurance in a Natural Disaster?

Most household policies or home insurance policies will cover against earthquakes. Some insurance companies take a compulsory deductible of 5% as most natural disasters are considered an “Act of God ” so no people are responsible for the disaster. The deductible always gets paid from your pockets because it is your asset. Even the insurance company cannot be held responsible as it’s a naturally occurring calamity so both sides have to make their contributions.

Some insurance companies do not have deductibles, whereas some insurance companies offer you an option to customise the deductibles so that the risk for the insurance company decreases and the premium can be paid in very low amounts by the insured. The policy will not need to file claims for smaller damages like shattering the window glasses due to a storm or house walls damaged by a tree fall, etc.

Home Insurance Coverage: Key Exclusions During Natural Calamities

Home insurance policies do not cover specific things even when they provide cover for contents inside your house during a natural disaster. 

Those items include:

• Cash
• Documents
• Any kind of important Certificates, (Share, Personal, house related, etc)
• Any credit or debit cards etc. 

Exceptions under what is not covered include : 

• Some pieces of jewellery and valuables are covered but subject to specific terms and conditions made by the insurance company.  
• Gadgets and electric appliances will be covered but, only the cost of repairing or restoring the item to the condition in which it was before only will be provided.

What Does Flood Insurance Cover in a Natural Disaster?

Imagine a massive flood happening in the place where you live. It can destroy almost everything in just minutes. And certainly, it is unpredictable when the rains are heavy then you get a hint of the upcoming floods. This is a natural disaster.

Flood Insurance covers your home and belongings, especially in the event of a flood and if the same is damaged by the flood. This type of insurance is most necessary for your house if it is situated in a high-risk flood-prone area.

The basic comprehensive home insurance will include flood cover too as it’s a subpart of home insurance in India which you have to opt for separately if your house is situated in high-risk areas which will get you the coverage for repairs for your house if it gets damaged when affected by the flood. Most houses situated near river banks etc are prone to floods.

The damages will be several types due to a flood caused by rains or heavy overflowing rivers etc. which includes:

• Water leakage 
• Structural damage to your house
• Furniture damage
• Personal belongings damage 
• Floor damage
• Short circuit, etc.

Flood Insurance Coverage: Key Exclusions During Natural Calamities

Just like the exclusions made under the household policies even under the events of natural calamities, flood insurance cover also got some exclusions.

The exclusions include : 

• Wilful negligence of the owners
• Wilful destruction by the owners
• Non- disclosure of their fault
• Items that are not listed under the policy terms
• Any debris
• If you fail to inform on time
• If the policy has lapsed

Understanding Landslide Coverage in Natural Disaster Insurance

Landslide is major destruction that leads to the whole destruction of a property that you might own and it sweeps away the whole asset that you might have. Landslides can occur due to earthquakes or even floods. But it is normally not included under a basic household policy in India and the insured has to take a separate cover for the same.

The cover provided after you decide on a plan covering landslides includes:

• Coverage of the structure and contents inside the house
• Damages caused to your Valuables inside the house

Landslide Coverage: Key Exclusions During Natural Calamities

Like other insurance policies, there are some factors that are not covered in the event of a landslide. 

Here is a list of such factors:

• Deductibles
• Earnings
• Architect fees etc
• Debris
• Loss of Rent
• Any additional expense for alternative accommodation etc
• If the policy has lapsed

Car Insurance: What’s Covered Against Natural Calamities?

Fortunately, several insurance companies give cover for cars against natural calamities in India. A car insurance policy covers any damages that occurred to your car from natural disasters such as cyclones, floods, earthquakes, etc. but your car must have a comprehensive insurance cover as the minimum third party insurance cover as required by the law will certainly not cover damages for your vehicle.

The perks of comprehensive car insurance policies are you don’t have to pay additionally to get any coverage for the damages that occurred due to natural disasters other than the exclusions mentioned by each insurance company.

You get a lot of benefits for your car if you opt for a comprehensive car insurance policy like:

• You can make cashless claims
• You get NCB provision
• Inspection of your vehicle will be stress-free

It is highly recommended to get a policy cover for your vehicle if your residence is situated in a disaster-prone area as the vehicle can get damaged easily including the interior parts as well. However, there are add-on covers for even the comprehensive policies to cover specific requirements of the insured’s vehicle according to his needs. These might be frequent damages for only certain parts of the car due to frequent natural calamities in high-risk areas.

You might have to opt for a separate cover for covering these as they might not be covered under your basic comprehensive car insurance policy. There are a lot of different add-on cover options to select from for your particular type of requirements with just a small extra charge with the normal premium. 

Some basic add-on covers you can opt for are :

• Engine protection cover
• NCB protection cover
• Consumable cover
• Zero depreciation cover, etc

Top 4 Home Insurance Companies In India Providing Cover Against Natural Calamities 

Top 5 Car Insurances providing cover against Natural Calamities

All the Monthly insurance premiums are current rates which might be changed as per the company revised terms anytime. So it’s always better to check with the respective insurance companies for clarity on the same before buying a cover.

While getting your assets insured to protect against natural calamities it is equally important to have proper life and health insurance in place for the policyholder. This is very useful to protect your life and keep your health safe in times of major distress like these.