Make Sure Your Car And Home Are Adequately Insured This Monsoon

While monsoons in India bring the much-needed respite from the heat wave, it quite often leaves behind a trail of losses. In India, clogged roads and inundation is the most common sight after one sees the first heavy spell of the monsoon. It creates a pandemonium due to the damages to property, vehicles and infrastructure and what adds to the mayhem is the lack of adequate insurance coverage against the damages.

What affects you and me the most is the damage caused to our assets – either our home, its contents or our cars and bikes. Further, if we do not have the right insurance cover, it takes not only a mental but also a financial toll on our lives as it may take us a long time to recover from the loss or build new assets.

The number of claims insurers receive during this season is higher than during any other period of the year. Some of the most common type of losses reported during monsoons are damages to home and its contents due to inundation and floods or due to storms and cyclones. Mishaps due to poor visibility on foggy roads or multiple vehicle collisions is common during this time of the year. Apart from accidental damage, heavy rains can cause stalled vehicles in water-logged roads and engine damage or seizing can become common traumas.

It is always advisable to stop driving in a water logged area, to avoid any unnecessary damages. One must also never try to restart the stalled vehicle by cranking or pushing it, as it may damage the engine and the electrical system. However, sometimes despite your best efforts, your vehicle may incur rain damage and you may face a situation wherein your standard motor insurance cover may prove insufficient to cover these losses.

It is important to note that a standard motor insurance policy does not cover damage to the engine due to water seepage (hydrostatic lock), besides it does not pay the depreciation amount on the repair and replacement of parts, which one ends up paying out of their own pocket. The solution to these problems are Motor add on covers that provide coverage for such damages that may not be typically covered by a standard motor insurance policy and reduce your out-of-pocket spends towards repairs. The add on covers that could be very helpful during eventualities like this are:

• Depreciation Cover - The depreciation cover takes care of the complete repair and replacement cost of the parts of your vehicle, thus doing away with any major costs pertaining to depreciation that you would otherwise have to bear yourself.
• Engine Protector – It covers engine-related damage that may occur to the vehicle due to inundation or seepage of water into the engine and also damage caused to the gear box due to leakage of oil.
• 24*7 Spot Assistance – It offers round-the-clock roadside assistance and benefits ranging from that for a flat tyre, fuel assistance, towing facility and even medical coordination and legal help, if the need arises.

These add-on covers are affordable and light on the pocket. For example, for a new hatchback model with an IDV (market value) of Rs. 7 lakh the add-on covers will cost approximately between Rs. 4,000 – Rs 6,000.

Large scale inundation in the event of heavy rains that result in flooding cause massive damage to homes. In such a scenario, apart from monitoring rising water levels, you must shift portable assets/equipment and important documents to higher ground before water enters your house. You must further ensure electrical wires/sockets do not come in contact with the flood water. Deluges such as the recent Chennai floods can cause immense damage to the house and its contents, wiping away a person’s life savings that he has invested in building the house. However, though most people avail motor insurance because it is mandatory, many shy away from buying a plan to protect their homes or are unaware that such a policy exists. Home insurance is one of the most important covers one must avail. If you have already availed a policy for the structure, it is equally essential to be adequately insured by extending the cover to the contents of the house as well which would include your furniture, fixtures, electrical, electronic and mechanical appliances, clothes and sanitary fittings.

A home insurance cover not only protects your home and its contents against damage due to fire and allied perils, burglary, robbery, theft, breakdown of electrical and mechanical appliances,  but also against flood and inundation. Contrary to the perception that such a cover is expensive, home insurance for the structure and contents is an affordable product. Insuring a house worth Rs. 50 lakh would only cost approximately Rs. 2,600 annually for an all risk cover that would offer protection even for flood-related damage. A policy that covers both the house for Rs. 50 lakhs as well as its contents for Rs. 5 lakhs against all perils would come at an annual premium of around Rs. 7,000. New age home insurance covers allow you to avail the policy with minimum documentation. For instance, one does not need to submit a list of documents for contents worth Rs. 5 lakh and above. It also provides a cover for the contents on “new for old” basis, wherein in case of loss, the item is replaced by a new one of the same kind and capacity.

Stay cautious this monsoon and save yourself the troubles pertaining to your vehicle and home. If your assets still incur damages despite your best efforts, make sure to avail the right combination of insurance covers to avoid major out-of-pocket expenses towards repair or replacement.

(This article is authored by  Sasikumar Adidamu, President and Chief Technical Officer, Bajaj Allianz General Insurance)