Insurance companies on Thursday said they will honour claims related to property and motor vehicle damage on account of cyclone Amphan that tore through Bengal on Wednesday evening. The state government has estimated damages worth around Rs 1 lakh crore on account of the cyclone.

Vehicles stranded in the city were severely damaged by the trees and poles that got uprooted by the storm. Waterlogging because of the heavy rains also affected vehicles. Many vehicles parked close to each other also collided.

According to insurance industry executives, natural calamities such as storm, typhoon, flood and inundation are “Act of God” and most policies that cover vehicles have them embedded if it is a comprehensive cover.

Motor insurance policies are of two types - a third party cover that only insures against physical damage to a person by the vehicle of the insured and a comprehensive cover that protects damage to the vehicle.

“We are seeing rising instances of flood, cyclone and other natural calamities and it has now become an industry practice to inform the customers the benefits of a comprehensive motor cover that protects against such calamities,” said Sanjay Datta, chief of underwriting, claims and reinsurance, ICICI Lombard.

However, one has to be wary of the fineprint of the policy terms and conditions. There are two kinds of damage that a disaster like this can cause to a vehicle: damage to the exterior of the car and the mechanical parts such as the engine. Damages to the exterior of a car could be recovered easily from the own-damage insurance part.

However, industry experts said it is better to not start a car submerged because of waterlogging as manual intervention after the damage and before the survey may lower the probability of the damage being covered.

Property cover

A comprehensive property insurance will also cover damage to residential and commercial buildings as well as industrial units. Such policies typically cover damages because of fire, lightning, flooding and storm.

“As a principle, we urge most clients to take a comprehensive policy because it is difficult to predict any damage on account of the natural calamities. But in the case of property insurance, there is an option to opt out of such a cover. But the premium differential won’t be much,” said Datta.

“It is critical to have an insurance cover in place beforehand as insurance only covers unpredictable losses. So, for instance, if a person goes to buy a comprehensive motor insurance policy for a car which is already damaged, that person won’t get a cover for the damages already befallen. We are usually flooded with queries for buying various insurance covers, especially home and comprehensive motor insurance policies, after such natural calamities, but these queries die down after the effect of the natural calamity reduces,” said T. A. Ramalingam, chief technical officer, Bajaj Allianz General Insurance.

Insurance companies further said that the survey process to assess damage will mostly be digital on account of the Covid-19 related situation.