Wednesday, March 5, 2008

Insurance against landslides : a personal experience




Like so many other people, I have been getting my house insured (Householders Insurance Policy) for many years,earlier with National Insurance Company and more recently with BAJAJ Allianz.

I’ve always thought; “AT LEAST I'll have something to fall back on” even IF a landslide does take place. So for years the companies have been gobbling up my money assuring me that my home is insured for, amongst other things fire and natural calamities including landslides.

Here comes the interesting part:-

Following the heavy rains in Sep07, a part of the retaining wall below my house collapsed, necessitating costly repairs… so I put up a claim (my first one in all these years) to Bajaj Allianz , since THAT, I thought , was what insurance was all about. What I told the company was that in order to prevent much greater damage to my home in the future I would have to get the wall repaired as soon as possible.

But rather ironically Bajaj Allianz, like the Government ,does not believe in landslide prevention. Here is the reply I got from the company..

“Since the loss has affected only the retaining wall and no damage happened to your building, therefore the claim is repudiated and we close the file as NO CLAIM”

I am still pursuing the case with Bajaj Allainz but what I want to caution other gullible people like me about is that :-

a) Insurance company policies like so many others are plains-centric. No one loses land in a flood or in an earthquake in the plains so land cannot be insured (even though we lose land in landslides.)

b) Some insurance companies do insure retaining walls (whereas Bajaj Allianz has refused) but then you have to be specific about it. Please grill the insurance agent about specifics and read the fine print before you hand over the cheque.

c) Be sure that the insurance company will, in all probability never pay the full amount insured. In such an eventuality – do take the company to consumer court.

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Comment by praful rao

Having said the above I confess at being a novice regarding insurance and would be glad to have inputs from more experienced people.


1 comment:

Upendra said...

INSURING HOUSES/BUILDINGS IN THE HILL AREAS OF DARJEELING AND SIKKIM HIMALAYAS - AN ENGINEERS POINT OF VIEW.

The Darjeeling Sikkim Himalayas fall in the young mountain ranges, geologically susceptible to landslides. To make matters worse, the area is also located in Seismic Zone No. 5, where high intensity earthquakes are probable at regular intervals. The rainy season extends over a continuously long period of about four months from mid-June to mid-September, and the rainfall intensity is high, causing rampant landslides every year!

Due to non-availability of flat lands, most building activities take place in unstable hilly terrain where the general land inclination exceeds 45 Degrees. Earth cutting to flatten the land, followed by construction of breast-walls and retaining-walls are a must, before one can proceed to build a house or building. It can, therefore, justifiably be concluded that breast walls and retaining walls must be taken as part and parcel of any building activity in the hills. Damage due to landslides or other causes, to any portion of such walls surrounding the house or building, must be considered to be a direct threat to the house or building itself and/or to its inhabitants. Insurance Companies must incorporate the abovementioned facts while drawing up their Policies for Insuring Houses/Buildings in the Hill Areas and not shy away from their boundent duties while responding to insurance claims.

Just as Health/Medical Insurance covers treatment of a disease (and one does not have to die before registering an insurance claim!), so also claim for repair/rebuilding of breast/retaining walls in the hill areas, should be favorably considered and honored (BEFORE the house/building actually cracks up or falls down!).

I think House/Building Insurance in the Hills is a relatively recent thing, so Insurance Companies are having a field day by taking advantage of the gullibility of the simple folk like us. States like Himachal Pradesh, who have hills like Shimla, may be better equipped to throw light on some of the contradictions!

- U.M.Pradhan
Consultant Director,
Specktrum Consultancy.