After Delhi, an earthquake in the Bay of Bengal on Feb 25 made Kolkata residents wake up to tremors. This once again shows why it is important to have home insurance.
Any loss to a home/house/apartment due to an earthquake is covered under a home insurance policy. This policy covers damage to both the building/structure of the house and the contents of the home. “The coverage to the building would cover the cost of construction of the building in case of damage due to an earthquake. The cover for contents such as furniture, fittings, electrical items, valuables, etc., and the claim is paid based on the extent of the damage due to an earthquake,” says Ashwini Dubey, head, home insurance, Policybazaar.
Any Individual can take a home insurance policy for a single apartment or an independent house both for its building structure and for contents. “Similarly, home Insurance can be taken for an entire residential building as well in the name of the group housing society. This would cover any loss to the building, lifts, generators, etc. due to an earthquake. One can take a Home Insurance policy for a single apartment as well,” says Dubey.
What To Do
To get reimbursed for earthquake damage, you must immediately notify your insurer with details such as your policy number and name and any reports to the authorities. Report the damage to the statutory/relevant authorities, take steps to prevent further damage, and preserve evidence, including photographs. Assist the insurer by providing the necessary information and documents. Finally, submit the claim form within 30 days of noticing the damage.
How Earthquake Damage Is Covered
Reimbursement of a claim under damage by earthquake shall depend on the type of policy, coverage opted and basis of sum insured declared for building structure.
There are two ways to consider the sum insured. The first is choosing a product that offers the market value of your home. “In this case, the customer and insurance company mutually agree on a price for your property prevailing in the market on that day of insurance. In the event of a loss, the insurance company will only pay that agreed amount in case of total loss at maximum,” says Gurdeep Singh Batra, head – property UW (E&S), risk engg services, and global accounts, Bajaj Allianz General Insurance.
The second is reinstatement basis value, where your home is covered based on current market reconstruction/reinstatement cost prevailing in the market. “It means that the insurer will settle the total loss claim for the reinstatement cost not exceeding the declared and opted sum insured for the building damage,” says Batra.
Under the Bharat Griha Raksha Policy, there is automatic coverage for general contents amounting to 20 per cent of the Sum Insured for Home Building cover, capped at a maximum of Rs 10 lakh, provided both home building and home contents covers are purchased. “You can increase this amount by declaring the details, which becomes the sum insured for contents, or you can choose not to buy this cover,” says Batra.
