Home Insurance Scheme of Modi Government will increase insurance Penetration in India

DELHI, India - July 31, 2021 - PRLog -- IFI has welcomed the thinking of Government of India for planning to launch a home insurance scheme for all throughout the country. The scheme will cover damages caused to lower income group from floods, earthquakes and fire. Sum assured per house will be Rs 3, 00,000. Even though various General Insurance Companies have come up with premium of Rs 1000 for the scheme, whereas govt is looking at pegging the premium to Rs 500.

It is a welcome and commendable initiative from the govt and much needed in our country.Home insurance penetration is in India is less than 1% and there is huge potential to take it to higher levels.Countries like US, UK, France, Australia and China have home insurance penetration in the range of 90-97%. According to Sethi "the reason has been that as and when calamity had occurred in the past then payment has been made out of central Government or State Government Funds.

It is a staggering fact that a large landmass of India is prone to natural calamities like earthquakes and floods, as we have witnessed in past few years. India, in particular is highly vulnerable to substantial losses in the event of an earthquake or other natural disaster due to dense population, poor urban planning and non-adherence of safety regulations. At the same time, a population of 1.3 billion people requires massive housing in urban as well as rural/hilly areas.

Approximately 59 percent of India's land mass is prone to earthquakes of varying intensities. About 11 percent area falls in zone V, 18 percent in zone IV, and 30 percent in zone III. The entire Himalayan belt is considered risk prone to devastating earthquakes of magnitude 8 and more e.g. there have been a series of mild earthquakes recently in Delhi-NCR and other parts of the country. According to experts, Delhi-NCR is in the second-highest seismic hazard zone (Zone IV) and a stronger earthquake is possible.

In last few years, Climate change, erratic weather patterns and massive urbanisation has resulted inregular flooding in all cities small or large, during monsoons. There is massive damage to property and belonging as we witnessed in Chennai floods and Mumbai torrents year after year. Landslides, cloudbursts and flash floods in hills sweep away entire villages and homes every year. An analysis by the DTE-CSE showed that in the last 65 years (1952-2018), there has not been a single year when flood didn't impact the country with significant losses to lives and property.Floods killed 109,412 people in the span.

Joyshree Karmakar
Email: vp@ifingo.org