India is becoming more vulnerable to the catastrophic side of nature. Whether we call it a manifestation of rapid climate change or urbanization, calamities like floods, cyclones, landslides, heat waves, and droughts have become more frequent and severe lately. Given these risks, getting insurance is not just a wise move, but an essential one.
In this blog, we will explore how to get the right insurance plan for weather-related damages, types of products available, and more. Let's read on!
Some Important Facts and Stats
- Before we move on to how to get the right insurance plan for weather-related damages, let's take a look at the statistics below, highlighting the need for robust disaster preparedness.
- According to the CSE India (Centre for Science and Environment) reports, India recorded more than 3,000 casualties and ₹50,000 crore in economic losses from climate-linked disasters in 2023 alone.
- Nearly 59% of the Indian landmass is prone to earthquakes, ranging from mild to very high on the intensity scale. And about 15% of the landmass is vulnerable to landslides.
- Around 12% of the land is prone to river erosion and flooding. Of the 7,516 km of the Indian coastline, approximately 5,700 km is susceptible to cyclones and tsunamis.
- Again, about 68% of cultivable land encounters drought risk.
Types of Insurance Covering Weather-Related Damages |
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Insurance Type |
Weather Events Covered |
Key Features |
Important Notes |
|
Home Insurance |
Fire and lightning Storms and cyclones Floods and water ingress Earthquakes and landslides |
Coverage for structure and contents, Standard Fire and Special Perils” coverage mandated by IRDAI. |
Not all policies include natural calamities by default. Make sure to check the inclusions and exclusions beforehand. |
|
Motor Insurance |
Flooding Falling Trees/objects during storms Landslides and earthquakes |
Only comprehensive policies cover weather-related damage Add-ons may include the following: Engine Protect Cover Zero Depreciation Cover |
Third-party insurance does not cover own damage due to weather events. Beware of it and clear all your doubts before shelling out. |
|
Crop Insurance |
Drought Unseasonal/excessive rainfall Hailstorms Floods Cyclones |
Offered under PMFBY (Govt. scheme) Subsidized premiums Covers pre- and post-harvest losses |
Farmers can apply via banks, CSCs, or Website of the Pradhan Mantri Fasal Bima Yojana |
|
Commercial Property Insurance |
Floods Cyclones Storms Earthquakes Landslides |
Covers damage to buildings, machinery, and inventory Suitable for factories, shops, and warehouses |
Crucial for businesses in disaster-prone areas |
How to Choose the Right Policy?
The table below will help you understand the criteria based on which you should make the right pick:
|
Criteria |
Description |
Examples |
Tips for Evaluation |
|
Policy Inclusions |
It refers to the types of weather events covered by the policy (under own-damage cover). Comprehensive plans are more likely to include natural perils like floods, cyclones/storms, hail, heavy rain, etc. Third-party only insurance policies are unlikely to cover these events. |
Floods, Cyclones, Storms, Hailstorms, Landslides, Heavy rain (waterlogging) |
Make sure that the policy you intend to buy is comprehensive (own-damage). Third-party only policies are likely to exclude weather perils. Ensure that specific perils (like flood, cyclone) are explicitly listed in the policy. |
|
Add-Ons |
These are optional extensions that cover specific risks not included in the main policy. These are especially useful for monsoon-related damage or roadside emergencies. These add-ons protect against losses (e.g. engine water ingress, towing needs) not covered by a standard plan. |
Engine Protection rider is likely to cover water ingress to the engine Roadside Assistance pays for towing, emergency fuel, alternate transport, or accommodation Zero Depreciation covers things like Return-to-Invoice, Consumables, Key/Lock Replacement, Tyre Protect, Rental Car Cover, etc. |
Choose add-ons based on your risk profile (e.g., engine cover if you live or travel to a flood-prone area). Compare the extra premium vs. benefits beforehand. |
|
Claim Settlement Ratio (CSR) |
It refers to the percentage of claims settled by an insurance provider out of the claims filed. This ratio indicates the insurer’s reliability. The equation is - the higher the CSR, the better the track record of honoring claims. |
To check the CSR ratio of the insurers, check with IRDAI. |
Make sure to refer to the latest IRDAI Handbook of Insurance Statistics or industry reports for CSR figures. Go for insurers with consistently high CSR (aim for >90–95%). Also, consider claim processing speed and customer service as well. |
|
Exclusions |
These are events or conditions explicitly not covered by the policy. Common exclusions include negligence, pre-existing damage, maintenance issues, and non-fortuitous causes. |
Pre-existing damage (loss before policy inception) Wear & tear/ageing Mechanical/Electrical breakdown (unless caused by a covered event) Negligence (drunk driving, no valid license) War/nuclear/pollution, among others, |
Read the exclusions section carefully, |
FAQs
Can renters or tenants get insurance for weather-related damages?
Yes. Tenants can choose contents insurance to cover their belongings inside a rented home. However, structural damages are the responsibility of the property owner.
What documents are required to file a claim for weather damage?
For specific documentation needs, although it is always wise to check with your insurance provider, here are some of the commonly required documents:
- Policy document
- FIR (if needed)
- Pictures of the damage
- Surveyor’s report
- Repair estimates or bills
Can businesses insure inventory or stock against cyclone or flood damage?
Yes, of course! Commercial property insurance typically includes structural damage, machinery or equipment loss, and inventory and stock damage.
What add-ons should I consider for adequate protection?
Some useful add-ons include the following:
- Engine Protect Cover (for water damage in floods)
- Zero Depreciation Cover
- Alternate Accommodation (for home insurance)
- Debris Removal (for property damage)
Does third-party motor insurance cover flood or storm damage?
No. As the name suggests, third-party insurance (although mandatory by law) only covers damage to others. Only comprehensive motor insurance covers weather-related damage to your vehicle.
