When we read about natural disasters in newspapers, we often dismiss them thinking that 'it will never happen to me'. But data from the National Disaster Management Authority shows that India is highly vulnerable to a wide variety of natural disasters, ranging from earthquakes, floods, cyclones and tsunamis. Climate change is also increasing the frequency of such events.
Chennai-ites will tell you how big a setback their personal finances have received from two consecutive years of unprecedented natural disasters. If last year's record rains and floods led to losses to cars, home appliances and furniture for home owners, this year's cyclone Vardah has felled trees, battered roofs and compound walls and generally wreaked havoc on home owners. The industry body Assocham has estimated the aggregate losses due to Vardah at Rs 6,500 crore.
Taking property insurance that protects both your home and its contents is the best way to disaster-proof your savings and bounce back quickly from such setbacks. Leading insurers offer comprehensive plans that protect your home and its contents against a variety of contingencies - earthquakes, floods, cyclones, fire and even acts of terrorism.
With a steady fall in property insurance premia in the last few years, such covers come at pretty reasonable rates, too. ICICI Lombard, for instance, quotes a premium of about Rs 25,000 for a five-year comprehensive cover of Rs 20 lakh. While taking property insurance, be sure to make a realistic assessment of the value of your home and its contents as that will decide the sum assured. Select a reinstatement cover (one that allows you to replace your belongings) as opposed to an indemnity cover (which only compensates for actual losses).
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