Why you might want to go ahead and file a flood insurance claim: It may not be worth it, says flood insurance agent
The flood insurance industry in India is facing a serious crisis.
The average premium is only Rs. 8 per lakh.
There is no flood insurance bureau for people living in the flood-prone regions of the country.
But a flood insurer can charge an annual premium of Rs. 10,000 for a single-family home and Rs. 1,500 for a larger one.
The average rate of premium has risen by 50 per cent since 2015.
In 2017, the insurance regulator had proposed to charge a premium of up to Rs. 6,000 per annum for flood insurance in a single family home, but that was scrapped by the government.
Now, the government is proposing a one-year-period for flood coverage of up in the range of Rs 6,500 to Rs 7,000.
The flood insurance regulator has suggested that insurance agents be allowed to charge premiums for flood and drought damage, but there are concerns about the effect this will have on the flood insurance market.
“The flood insurers, especially those dealing with disaster related insurance, will have to make a financial calculation of their costs in case of a flood, and will also have to decide whether to pay premiums in the event of a drought, said Anil Jadhav, chairman of the flood and flood management advisory committee of the insurance industry.
The insurance industry will be looking at the latest data on the state of flood insurance policy, said Gopi Suresh, executive director of the Indian Association of Flood Insurance Agents (IAFIA). “
The insurers, whether they are flood insurance agents or commercial insurers, will need to decide what they are willing to pay for a flood and how much they can expect to pay in case the insurance companies decide to make flood claims.”
The insurance industry will be looking at the latest data on the state of flood insurance policy, said Gopi Suresh, executive director of the Indian Association of Flood Insurance Agents (IAFIA).
“The flood policy will be reviewed every six months and the flood claims will be submitted in the new flood season,” he said.
The flood insurer has to submit the claims within a certain time, so if the insurance agent does not meet the deadlines, the claims will not be processed.
“For commercial insurers to get a premium, they have to meet a certain number of claims.
It is the responsibility of the government and the insurance agency to take care of this.
In other words, the flood insurer is responsible for paying the claims.
But if the government decides to make claims for flood damages, the insurer will have no choice but to do so,” Suresham added.
While the flood policy is not a panacea, it can at least give flood insurers some breathing space.
“There is no insurance policy for the entire state of Gujarat,” said Anjali Kumar, vice-president of the State Flood Insurance Board.
She said the insurance policies of other states are not in the same condition as the Gujarat flood.
“There is a need for a change in the policy so that the policy of the state floods is adequate to the state’s needs,” she added.
But the insurance policy does not offer a silver bullet.
“Insurers cannot guarantee flood protection in a flood.
The state is in the midst of a cyclone and the sea is rising.
We cannot protect our homes with flood insurance,” said Kumar.
She added that she was surprised to see that flood insurance premiums in some states were going up, and that the insurance agents are getting paid even as their losses were increasing.