BANGALORE: Currently, many of the insurance companies like Oriental Insurance company, United India Insurance company and National Insurance company have increased the premiums for almost all the hydroelectric projects across India. This sudden rise is the after effect of the flash floods that took place in Uttarakhand last year as these flash floods led to huge claims, reports Economic Times.

After the floods in Uttarakhand, hydroelectric companies like National Hydroelectric Corporation and Jaiprakash Associates received good amount of claimed money. After receiving a huge amount of claim they are now looking forward to revise their existing rates. Usually during the first quarter of every financial year, the insurance contracts of most of the hydroelectric projects are renewed.

"Last year's Uttarakhand tragedy has completely changed the risk perception of hydro power plants for insurance companies. In response to tenders of power companies seeking quotation for re-insurance, insurers have asked for double or triple the earlier rates for power projects," a senior power ministry official said.

Raising premium rates for hydroelectric company has become riskier but the insurance companies are forced to do so, said an official in National Insurance Co and he quickly to add that, "The projects get damaged every year during monsoons. But damage claims during last two years have risen sharply. Last year's Uttarakhand episode has compelled us to change our assessment." In addition to the increasing premium rates the renewal premium has also increased, as many of the companies that claimed for the damages couldn’t receive the same. The premium amount given to these hydroelectric companies varies for each project and it depends on several factors like location, size, company's background and extent of risk coverage.

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