Chennai: The catastrophic loss of property and lives due to the floods in Tamil Nadu could cost insurance companies around Rs.1,500 crore though exact estimates will be known only later.
“The loss due to floods is catastrophic. We have informed our reinsurers. We have received around 800 claims and the initial estimate of the loss is around Rs.500 crore,” a senior official of United India Insurance Co. Ltd. told IANS.
The official said the flood loss for the general insurance industry could be around Rs.1,500 crore – “around three times the value of our claims”.
But if one takes into account the uninsured moveable and immovable properties, then the amount would be several times more.
The heaviest rains in a century battered the districts of Chennai, Kanchipuram, Cuddalore and Thiruvallur over the past month, leaving around 325 people dead and causing widespread destruction.
Most claims lodged with United India are from corporates, industries, shopkeepers, warehouse operators and other organised sector.
“The loss claims from the industries are for damage to their stock and raw material, work-in-progress or finished goods,” the official said.
“Claims for motor vehicles and other household articles from individuals will take some time to come in as they have to first stablise their home front,” he said.
Officials of four government-owned companies met to discuss simplication of claims procedure for motor vehicles.
“Most vehicles would need only reconditioning. So based on the kind of damage, the claim payment could be made fast.
There need not be any individual vehicle assessment of loss which might delay the settlement,” the official said.
“On-account payment will also be made liberally before the final assessment of our liability is estimated.”
Insurers told IANS that a majority of the flood victims have not insured their homes and its contents against fire, floods, burglary and other risks.
“Even many of our own employees have not insured their homes,” the officer lamented. “Except my car, none of the consumer durables was insured.
My total loss due to floods will be around Rs.10 lakh,” Priya Batra, a resident of Kotturpuram, a posh locality in Chennai, told IANS.
According to United India Insurance official, flood damage to the buildings, doors and windows were also covered under the fire insurance policy normally taken by the housing loan players.
Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) on Monday – nearly a month after the onset of rains and floods – asked insurers to complete loss surveys within 72 hours of intimation.
The regulator also said that claims payment or on-account settlements were to be made within 15 days.