Nepal earthquake rings the alarm! Don’t just ensure your life but your home too

Calamities and misfortunes are often considered as warning bells for many. The devastating earthquake that hit Nepal and some parts of India and Bangladesh a few days back are no exception to this.

As per a news report by The Economic Times, enquiries about home insurance policies in India have suddenly surged up.

"There is a spike in demand and this will stay for a short time," Tapan Singhel, managing director and CEO of Bajaj Allianz General Insurance told the ET. "We have seen a similar spurt in the past " during the Jammu & Kashmir floods, the Uttarakhand floods and the Sikkim earthquake." As with all forms of insurance in India, home cover is also sparse. The number of insured homes is estimated at 20 lakh with annual premiums adding up to Rs 2,500 crore.

2011 census report confirmed, India had 33 crore homes, of which only half are of 'pukka' construction, or permanent in nature.

There is huge potential in the segment, with average premiums going up to as much as Rs 3 lakh, according to industry estimates. "Suddenly there is a spike in enquires, but conversion into a sale is hampered due to lack of widespread distribution," Sanjay Datta, head of underwriting at ICICI Lombard General Insurance told the financial daily.

Due to lack of awareness, companies are unable to capture demand. Experts believe, this may change following the devastation in Nepal.
Industry executives said that those residing in seismic zones need to buy home insurance to protect themselves.

Policies pay for damage to property and contents due to natural or man-made calamities, including earthquakes. Rates vary from 70 paise to Rs 1 per cover of Rs 1,000, depending on the area and the frequency. Many banks and housing finance companies insulate themselves from such possible risks by making home insurance mandatory for mortgage customers.

(Image: reuters)