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Flood insurance: Coverage, how to make a claim and other questions answered

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Floods, what we may call a peril contingency, can bring normal life to a standstill. It causes damage to roads, crops, homes and belongings as well.

Flood insurance: Coverage, how to make a claim and other questions answered
Floods, what we may call a peril contingency, can bring normal life to a standstill. It causes damage to roads, crops, homes and belongings as well. While the repair cost can be very high on pockets after the flood, having flood insurance means one is not required to worry much about the expenses.
Here are some of the FAQs related to flood insurance (the responses are compiled by Sharad Mathur, MD and CEO, Universal Sompo General Insurance Company):
What is covered by insurance companies during floods?
During a flood, insurance companies primarily cover property – fixed property, moving property, agricultural produce, non-farm assets, the property being erected and property in operation.
What are the exclusions?
Typical flood insurance would not pay:
  • A specified portion of the loss called a deductible or excess
  • Losses to bullion or precious stones, works of art, manuscripts, plans, drawings, securities, stamps, coins or paper money, cheques, books of accounts, or other business books
  • Loss, or damage by spoilage resulting from interruption or cessation of any process or operation caused by flood
  • Business interruption losses unless they are specifically opted for
  • Healthcare costs for flood-induced illnesses
  • Additional burdens like food-price hike
  • Losses due to delayed or no insurance payments
  • The challenges which women, as a gender, face in availing flood insurance because of the absence of legal ownership of farmlands and assets
  • The peril and asset-ownership-linked traditional flood insurance have to be supplemented by parametric insurance where compensation is paid basis a defined threshold without being linked to assets or physical loss.
    How can one put claims for floods?
    The claim can be lodged by physical communication modes, e-mails, connecting to insurers’ help-line numbers, call centres and claim intimation portals. The flood insurance policy number has to be referred to for letting the insurer decide on the admissibility and the consequent steps.
    The evidencing of damaged property will have to be preserved to the extent possible so that the assessment is proper and hassle-free.
    Documentation is important too but in case a flood is the cause of loss of documents, due consideration would be generally given by the insurers.
    When is the right time to buy insurance for natural disasters?
    Flood insurance, non-life insurance, in general, is taken for an annual period.
    If the insurance is taken for the first time, then it should be taken well ahead of the natural disaster.
    Catastrophe insurance, flood insurance, in particular, involves what is called a ‘waiting period’ beyond which only the coverage operates. It is usually not longer than 30 days.
    If the insurance is continuous without a break, then renewal should be done before the due date without bothering about or waiting for the impending time of the natural disaster.
    Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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