Life insurance firms see 40% rise in policies, post-quake, in Gujarat

Communal riots after Godhra train carnage also contributed to the surge

The earthquake in Gujarat in 2001 and the communal riots in 2002 may have been disasters for many, but they have been a boon for general insurance companies operating in the state.

According to an official at a private sector insurance firm, "General insurance companies in the state reported a growth of over 40 per cent in number of policies as well as premium collection soon after the earthquake followed by communal riots due to the increasing awareness among the masses."

"There has been a significant rise in demand for the Fire and Special Perils policy after the earthquake and riots. Earthquake and riots have been instrumental in increasing the awareness about insurance policies among the masses and we have achieved a growth of over 50 per cent in terms of premium collection and number of policies," said K Varadarajan, manager, Oriental Insurance Company, on Thursday.

Its Fire and Special Peril Cover is a comprehensive package that covers damages to structures due to fire, storm, tempest, flood and inundation.

"Gujarat is a potential and important state for us. Insurance awareness in the state is growing by leaps and bounds after the earthquake and riots. Its is ahead of other states in terms of insurance sector and our business has substantially grown here. We are maintaining a double-digit growth rate as compared with the industry growth rate of around 15 per cent," said Kartik Jain, head, marketing and alliances, ICICI Lombard General Insurance Company.

"We will pay you for any loss or damage to the property caused by storm, flood, cyclone, tempest, hurricane, tornado or inundation.

"But no payment will be made if such storm, and flood have occurred as a result of any earthquake, volcanic eruption or any other act of nature. However, if you pay an extra premium and avail of an earthquake cover, we will pay you any loss or damage caused to the property," said Jain.

The earthquake cover also offers extension of terrorism cover and covers the damages to a structure.

Rent expenses for alternative accommodation is also offered if the house is badly damaged and becomes unsafe for living. Insurance companies also provide rent expenses of up to Rs 1 lakh for up to six months.

"We will pay the policyholder for any loss or damage to the property caused by incidents of riots, strikes or any one acting with any harmful intention. But we will not pay the policyholder for any loss or damage caused merely because of total or partial stoppage of work or interruption," said Jain.