In spite of huge losses caused to home and property due to natural calamities, there are very few buyers for home insurance in India. The premium for home insurance is very cheap in comparison to commercial insurance covers.
Home insurance currently accounts for less than 1 per cent of the premium collected by insurance companies in the country.
The main reason behind low penetration seems to be lack of awareness among people to get their property covered.
“Whenever there is any such natural calamity of such magnitude, then we suddenly see a surge in inquiries for such (home insurance) products. However, the interest dies down soon and very little of it actually translates into sale,” Amit Bhandari, Chief Technical Officer, Magma HDI General Insurance.
A majority of the home insurance products available in the market comes as bundled offerings along with a home loan, and is often a ‘push product’ rather than a ‘pull one’. The small ticket size of such products also gives little incentive to insurers to come up with ‘innovative’ offerings catering to the needs of the segment.
“Distribution is also a major roadblock. We are, in fact, working on how to make the product more available through various channels, including bancassurance,” he said. When it comes to retail insurance, it is still life, health and motor that dominate the space. “The penetration of home insurance depends on the value of the asset,” said Sukhesh Bhave, Head – Accident and Health Claims, SBI General Insurance.
“Nearly 30 per cent of India’s landmass is susceptible to earthquakes of severe destructive force, while another 27 per cent is liable to face moderate earthquakes. This apart, close to 76 per cent of the country’s coastline is prone to tsunamis and cyclones, while 12 per cent is prone to floods,” said Mahavir Chopra, Director – Health, Life and Strategic Initiatives – Coverfox.com.
