Protecting against floods

The devastating floods in Kerala have caused billions of dollars' worth of damage - to lives, to homes, and to the state's economy. Many heart-rending images these last few days showed homes in Kerala completely submerged. Cars and other personal vehicles, too, stood no chance against water levels several feet high in many places. The intensity of the flood had taken the state by surprise. This makes the rest of us wonder how prepared we are to cope with a natural disaster in our own city. We can't take on nature. But we can take preventive measures such as buying adequate insurance. Home, property, and vehicle insurance can compensate you for losses suffered during natural calamities. Let's take a look at your options.  

HOME INSURANCE
Home insurance can be bought either by homeowners as well as renters. It can provide complete coverage against the financial liabilities arising from damages caused to your home. Typically, a home insurance can protect you against financial damages caused by theft, burglary, earthquake, fire, cyclone, flood, storm, riots, strikes, missile testing, lightning strike, and aircraft crash. Both natural as well as man-made damages can be covered. While buying a home insurance policy, carefully examine its inclusions and exclusions. For example, loss caused by fire may be covered, but damages from war will be a typical exclusion. Damages caused to the property through natural wear and tear, depreciation, and negligent use. Home insurance can be bought both by individual homeowners as well as by housing societies. Both the property structure as well as its contents can be covered under such a policy.

MISCELLANEOUS PROPERTY INSURANCE
A home insurance provides you the option of covering the contents of your home. This is useful not just for homeowners but also for renters who don't own property but merely want to protect their belongings. Insurance companies also provide you coverage for your precious items such as jewellery and valuable art. The premiums of such policy will depend on the value of the items you're trying to insure as well as the strength of security you've already put in place for the protection of those items. Typical exclusions would be losses caused by negligence or willful acts of destruction, gradual wear and tear, war, invasion, etc.

VEHICLES
Thousands of vehicles were severely damaged in the Kerala floods. The law mandates insurance for all vehicles. However, for protecting your own vehicle against damages and accidents, you need comprehensive insurance. Ensure yours isn't a basic third party liability cover but is a comprehensive policy. During floods, car engines can get severely damaged. You can get an insurance policy with an engine protection add-on to make claims for damage caused by water ingress or hydrostatic lock. Additionally, a zero-depreciation add on, or a return-to-invoice add-on can help you reclaim the full value of parts rather than their depreciated value. With a return-to-invoice cover, you can get back the invoice value of your car in case it gets totalled in a flood. Both the zero-dep and return-to-invoice covers need to be taken while the vehicles are new. Additionally, many comprehensive policies will allow you benefits such as towing and overnight accommodation, useful in case your vehicle broke down in a remote area and you needed it to be towed to the nearest garage along with accommodation for yourself during repairs. The more you pay towards your premiums, the better benefits you get. Always go online to compare your options to get the best deals.

HEALTH & LIFE
Needless to say, natural calamities claim lives and can disrupt a family's daily lives and finances. Nobody can predict where the next earthquake, flood, tsunami, plane crash, riot, or any other calamity will strike. All you can do is be prepared for the worst. You must have health insurance for each member of your family so that their emergency hospitalisation costs can be covered without depleting your savings. If your family members are financially dependent on you, you must adequately insure your life through term insurance. These insurance products are easy on your wallet but provide immense value along with tax benefits. With adequate preparation and insurance, you can keep your family and properties secure. You can't fight nature. But you can certainly protect your finances from nature's wrath.

— The writer is CEO, BankBazaar.com