Claims Ratio of Life Insurance companies calculated by the amount of Claims...
Terror attacks especially in congested parts of India don’t seem to end. 13th July 2011 etched another terrifying day for many after 26/11 Mumbai Attack, when a serial blast took place in some very congested places in Mumbai leaving everyone gasping!
The Mumbai diamond traders are petrified as their fellow traders lie dead in the middle of Zaveri Bazaar, the heart of diamond trading in Mumbai and many injured. With the rise of terror attacks in India, Terrorism Insurance has gained tremendous importance over the years. Terrorism Insurance is insurance purchased by property owners to cover their potential losses and their liabilities that might occur due to terrorist activities. Since Terrorism is a usual exclusion, the cover for the same needs to be availed additionally.
Infact, most shopkeepers at Zaveri Bazaar had taken insurance coverage only after the blast of 2003. After the 26/11 Mumbai Attack in 2008 it has been recorded that over Rs 600 crores of Terror Insurance has been paid as claim. It has also been clarified that any claim from the loss of life would not be paid out of the pool created for Terror Insurance. That would be accounted for separately. Loss of life would be accounted under Personal Accident coverage availed by each shopkeeper individually and cannot be clubbed with Terror Insurance.
Even though a shopkeeper avails Terrorism Insurance and sits peacefully assuming that he has fully covered his risks, there is a certain rule that he might be unaware of. According to insurance rules, the total claims that are payable per locality by any one or more insurers clubbed together is capped at Rs 750 crore only. Thus, a shopkeeper’s risk rises as the claim payable will be low for a highly concentrated locality even though he is covered under Terrorism Insurance.
Even though the extent of the damage is not ascertained till now, people have pulled up their socks to increase their insurance coverage to reduce risks. The merchants don’t even mind paying an additional premium for extra risk coverage from the reinsurers as well! But what about the common man who have been or could have been affected by just sheer misfortune to have been present at the situation? The only way they can transfer the risk of their lives is by adequately covering themselves by a Term Insurance Plan, where the family can at least survive on the Death Benefit in case of any such misfortune.
And this is a good reminder to all who still do not have adequate insurance coverage or personal accident policies so that your family is not left unguarded after a terror attack that might be in your neighbourhood. In that case one can insure that at least his family will not face any financial crunch if anything were to happen to him.
And finally remember not to touch anything that doesn’t belong to you, even if it is an umbrella, for you never know what lies beneath!