Globally, each year alone millions of dollars have been lost to floods, hurricanes, erosion, and other water related disasters. The aftermath of these disasters is untold hardship. However, the wise who have been able to transfer these risks to insurance companies, have little to worry about. The question now is this: How can insurance help against natural disasters?
Nigeria and the rest of the world experienced lots of flooding and water related disasters this year alone. Houses, streets got seriously flooded, cars submerged and so on. It was as if the flood gate of heaven was let loosed over the nation. Properties worth millions of naira were destroyed in the process, insurance claims poured in ceaselessly.
For those who have insurance on their properties, it was time to be rewarded for their pro-activeness but it was time to count losses for those who did not. Presently, the US and some other countries are battling with hurricane, first, it was Hurricane Hervey and now Hurricane Irma.
In all these how can insurance help? It would interest you to know that Insurance will grant you a great deal of cover and that at a very cheap cost. There are series of insurance policies that cover flooding and other natural disasters adequately.
We are going to briefly talk about each of the policies before analyzing how they cover natural disasters. Now let consider the following:
Fire and Special Perils Policy:
This indemnifies the policyholder against loss or damage to his property as a result of fire, lightning, explosion, storm (this includes wind, rain, tempest, hurricane, cyclone and typhoon), flood, earthquake, impact, aircraft damage, bursting or overflowing of water tanks, pipes and apparatus, riot and strike, malicious damage, bush fire and tornado.
This policy is available for Private dwellings and commercial (industrial) premises. Though the cover for these two are similar, the rates vary. In our subsequent post we are going to dissect the Fire and Special Perils Insurance Policy.
Comprehensive Householder Policy:
This is more like a four-in-one insurance package. It combines Fire and Special Perils, Burglary and Theft, Public Liability and Personal Accident Cover. The policy is usually divided into five sections as follows:
Section I – Buildings
Section II – Contents
Section III – Additional Expenses of alternative accommodation and loss of rent
Section IV – Liability to the public
Section V – Personal Accident
The policy could be effected by the owner of the building or tenant/tenants and it applies to both buildings and contents.
All Risk Insurance Policy:
This is the widest form of cover available for individual and commercial items e.g. jewelry, paintings, small moveable tools of trade, laptops, phones, field work equipment, cameras etc. This policy provides protection beyond the normal scope of fire and burglary policies as loss to the insured items due to accidents, larceny, infidelity as well as while in transit and/or temporarily housed are covered.
Combined Industrial All Risks Policy:
This is a package policy designed to include fire and special perils, consequential loss, accidental damage, burglary, money, goods-in-transit and fidelity guarantee. This policy can be easily tailored to the need of the insured to ensure adequacy of the cover. This is basically adequate for industries and companies.
Various Disasters Covered
It should be known that there is no standalone Special Perils Policy. It must be insured together with Fire. The Fire and Special Perils is divided into two sections – the Fire Section and the Perils Section. In this post, we shall concern ourselves with the Special Perils Section. Under the Special Perils Section of all the policies above, the following perils are covered:
- Storm: is atmospheric disturbance which include wind, rain, tempest, hurricane, cyclone and typhoon. Any damage due to any of the named atmospheric conditions is covered.
- Flood: is the overflowing or deviation of water from its normal channels of either natural or artificial courses; bursting or overflowing of public water mains or any other flow or accumulation of water originating from outside the building insured or containing the property insured. Any loss of property due to flooding is covered by the policy.
- Burst Pipes and Overflowing of Water tanks etc: Any loss or damage to property insured occasioned by burst pipe or overflowing of water tank is covered. During installation, repairs, removal or extensions or when the property is vacant any loss that shall arise are not covered.
- Impact: means force acting on another leading to damage. Under this policy, impact by vehicles and animals that led to damage are covered. For instance, if a vehicle or cow or horse collides with the fence of an insured building, it is covered under the policy.
- Earthquake Damage: the policy covers loss or damage to the property insured directly caused by earthquake shock, fire and/or volcanic eruption including flood or overflow of the sea arising from these events.
- Aircraft Damage: destruction or damage to the property insured (by fire or otherwise) due to aircraft and other aerial devices or articles dropping from above.
- Bush Fire: any destruction to the property insured directly caused by burning whether accidental or otherwise, of forest, bush or jungle and the clearing of land by fire.
- Explosion: Loss or damaged of property insured by fire or otherwise directly caused by explosion.
- Tornado and Cyclone: This complements the storm and flood extension, so granted together with the two. The policy covers loss or damage to the property insured (other than fire) directly caused by hurricane, tornado, windstorm or cyclone.
- Riot and Strike: are public disturbances that can lead to series of damages. The policy extends to cover loss or damage arising from such actions.
- Malicious Damage: This is offered together with the riot and strike perils. This covers the property insured for loss or damage directly caused by the malicious act of any person (whether due to a public disturbance or not).
As you have read that there is adequate cover for flooding and others, are you going to continue waiting? Why not make that move today? Get your properties insured as soon as possible.