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Home Insurance In High Demand After Nepal Earthquake

By siliconindia   |   Wednesday, April 29, 2015
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BANGALORE: Phones haven’t stopped ringing at the offices of insurance companies and page views for websites offering home insurance has spiked. The earthquake that reduced buildings to dust in Nepal has lead to hundreds of people inquiring about home insurance policies.

"There is a spike in demand and this will stay for a short time," said Tapan Singhe , the managing director and CEO of Bajaj Allianz General Insurance. "We have seen a similar spurt in the past — during the Jammu & Kashmir floods, the Uttarakhand floods and the Sikkim earthquake."

According to industry experts, there is great potential in the home insurance segment. "Suddenly there is a spike in enquires, but conversion into a sale is hampered due to lack of widespread distribution," said Sanjay Datta, head of underwriting at ICICI Lombard General Insurance.

Due to a lack of knowledge of the issue, the demand has been low, but experts say that may change following the destruction in Nepal.

Executives in the insurance industry have said that people living in seismic zones need to purchase home insurance in order to fully protect themselves.

Such policies compensate insurance holders for property damage due to natural or man-made catastrophes. Rates vary depending on a variety of factors, but most banks insulate themselves from risks by making it mandatory for customers to purchase home insurance.

Most banks have a clause in home loan contracts that stipulates that the recipient of the loan purchases insurance. If borrowers do not insure their property, the bank debits the premium from the borrower and pays for the insurance.

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