Cities overwhelmed by rain: Here's why you can't ignore home insurance

Contrary to perception, home insurance is not expensive. Cover for a home and contents worth Rs 50 lakh can be purchased for just Rs 1,500-Rs 2,000 annually

Several cities are overwhelmed by heavy rains, and reports of inundated streets and houses are pouring in.

 

Yet, despite recurring losses, home insurance penetration in the country remains alarmingly low.

 

Experts say that awareness and affordable policies can go a long way in protecting middle-class households from financial shocks.

 

Rising flood risks in cities

“Year on year, the world is witnessing a rise in floods and cyclones, and India is no exception,” said Shashi Kant Dahuja, executive director and chief underwriting officer, Shriram General Insurance Limited.

 

He pointed to Mumbai’s recent floods as an example where waterlogging not only damaged vehicles but also homes, furniture, and electronics.

 

“An appropriate home insurance not only covers the structure but also protects personal property, which is very important,” he added.

 

Similarly, Arti Mulik, chief technical officer, Universal Sompo General Insurance, said that low-lying areas like Dadar and Kurla in Mumbai often face inundation. “Residents suffer losses due to damaged electronics and furniture, and sometimes homes become uninhabitable. In such cases, policies may also pay for temporary relocation,” she said.

 

What’s covered and what’s not?

Policies cover flood, storm, cyclone, and inundation as standard covers. It may also provide protection against short circuits, appliance failures, and structural damage caused by moisture.

 

However, exclusions apply.

 

Dahuja highlighted that valuables like bullion, coins, and manuscripts are not covered unless specified. Mulik added that intentional damage, pre-existing defects, or long-term vacant homes may also fall outside coverage.

 

Hari Radhakrishnan, an expert of the Insurance Brokers Association of India (IBAI) explained that policyholders must ensure proper upkeep of the property and provide proof of ownership or lease for claims to be processed.

 

Affordability versus low awareness

Contrary to common perception, home insurance is not expensive.

 

“Cover for a home and contents worth Rs 50 lakh can be purchased for just Rs 1,500– Rs 2,000 annually,” said Dahuja.

 

Mulik added that a Rs 30 lakh cover may cost only Rs 2,000–Rs 5,000 for a 10-year term.

 

Despite this, penetration remains below 1 per cent.

 

Radhakrishnan blamed “poor awareness, fatalistic attitudes and the fact that most policies are sold only when bundled with home loans.”

 

Preparing for the rainy season  Experts recommend some simple precautions:

• Clear drainage systems and repair leaks before heavy rains. 
• Store household goods away from basements and open areas. 
• Maintain digital copies of bills, photos, and videos of valuables.

 

Document damage promptly and co-operate with surveyors during claims.

 

“Just as you prepare your car for the monsoon, households should also check their home insurance policies and keep emergency contacts handy,” Mulik advised.