The government may consider setting up a natural calamity insurance pool, especially in the wake of the Nepal earthquake that caused heavy loss of life and property, and sparked warnings that India too is at risk.
This insurance pool will be an addition to the existing national calamity fund and the Prime Minister’s Relief Fund.
Earlier in 2013, non-life insurance companies had presented a concept paper on the same to the National Disaster Management Authority (NDMA). The concept paper underlined the need to set up a pool to deal with such natural disasters.
The proposal is at a nascent stage, and the contours and the structure of the pool are yet to be decided.
“It is important to look into the issue, more so as several parts of India too are vulnerable to such incidents,” said an official source. The insurance pool is aimed at providing “event based insurance and ensure financial support to everyone affected by natural calamity.”
“Recent instances indicate that a large number of people affected by such calamities do not get any support due to lack of insurance cover, or they have to depend on government support. It is time we created such a provision that will support life, and help rebuild property in such catastrophes,” Rakesh Jain, CEO, Reliance General Insurance, told HT.
Several Indian cities, especially in the Himalayas and in the north-Indian states of Jammu and Kashmir, Uttar Pradesh, Uttarakhand, West Bengal, Assam and Delhi, fall under seismic zones.
With indiscriminate sprouting of high-rise buildings, the threat of damage in the event of any catastrophe is compounded.
Almost 60% of India is vulnerable to earthquakes. In 2001, the Gujarat earthquake claimed about 20,000 lives. The earthquake in Nepal last week has left over 6,000 dead.