Will your insurance survive the next storm? What most policies miss and how to fix it

India is now among the top five countries globally most affected by climate-related disasters. According to the India Meteorological Department and the Centre for Science and Environment, the country witnessed 314 extreme weather events in 2023 alone, resulting in over 3,000 fatalities and impacting nearly 2.5 crore people across 22 states. From flash floods and urban deluges to heatwaves and cyclones, the scale and frequency of such events are no longer exceptional — they’re a regular part of our reality.

And yet, our insurance preparedness has not kept pace. Despite rising awareness and growing policy adoption, a large number of Indian households remain underinsured or incorrectly insured for the climate risks they actually face.

Too often, policyholders assume that having an insurance plan automatically ensures protection. But in the wake of a disaster, many find out — too late — that their policy excludes the very thing they needed it for.

Extreme Weather Is No Longer an Exception

From Guwahati to Gurugram, India is facing a new normal:

● Monsoon rains flooding major urban centres like Delhi, Mumbai, and Bengaluru

● Heatwaves breaking decades-old records in states like Rajasthan and Uttar Pradesh

● Cyclones like Michaung and Biparjoy disrupting lives and infrastructure across eastern and western coasts

● Landslides and cloudbursts in Uttarakhand and Himachal claiming lives and destroying property

The damage in 2023 alone crossed ₹25,000 crore.

But while the risks grow, most general insurance products—be it home or motor—still follow outdated templates, often excluding damage caused by natural catastrophes unless proactively added through riders or endorsements.

Why Your Policy Might Fail You When It Matters Most

1. Natural Disasters Are Often Excluded

Many standard home and motor policies do not automatically cover floods, landslides, or storm-related damage. These must be specifically opted in via add-ons or comprehensive plans.

2. Engine Damage Needs a Specific Rider

Water-logged engines during monsoon season are not covered under basic motor insurance. Engine protection is a separate, often overlooked add-on—yet critical in cities prone to flooding.

3. Home Insurance May Not Cover Contents

Most basic home insurance plans only cover structural damage. Furniture, electronics, and jewellery are protected only if you have a “structure + contents” policy.

4. You Could Be Underinsured Without Realising It

If your property value has increased or you’ve purchased new appliances or electronics but not revised your sum insured, your policy may fall short during a claim—even if approved.

5. Claims Get Rejected Due to Technicalities

Delayed intimation, missing documents, or reliance on ambiguous “Act of God” clauses can result in claim denial — even when damage is legitimate.

How to Climate-Proof Your Insurance

If you live in India today, insurance needs to go beyond paperwork. It must be aligned with real-world risk. Here’s how:

Ensure Natural Calamity Coverage Explicitly check that your policy includes floods, cyclones, landslides, and earthquakes. If not, ask for it to be added.

● Add Engine Protection to Your Motor Policy

Especially relevant during the rainy season, this protects against costly repairs caused by water ingress.

● Upgrade to “Structure + Contents” for Home Insurance

Cover what’s inside your home — furniture, appliances, valuables — not just the walls.

● Keep Digital Records

Maintain photos, invoices, and videos of major belongings. These serve as proof and speed up the claims process.

● Read the Exclusions — Not Just the Benefits

Understand what your policy does not cover. It can make the difference between a claim being honoured or rejected.

● Don’t Wait for the Weather Alert

Policies bought or upgraded after a red alert or cyclone warning may not be valid for that specific event. Plan ahead.

The Bigger Problem: A False Sense of Security

India has issued over 30 crore general insurance policies. But a high number of claims are either rejected or only partially paid not due to fraud, but due to gaps in coverage or awareness. Too many policyholders discover these shortcomings after a crisis hits. And by then, the financial and emotional cost is already high. This isn’t just a product issue — it’s a perception issue. We equate “having insurance” with “being protected.” But true protection requires the right policy, the right features, and proactive planning.

Don’t Just Ask: “Do I Have Insurance?”

Ask: “Will It Actually Cover Me When I Need It Most?”

In an age of intensifying climate risks, insurance must be more than a checkbox. It must perform under pressure.

So, before the next storm hits—read the fine print, ask your insurer the right questions, and make sure your policy is equipped for the world we live in now.

Because while we can’t stop the rain, we can prepare for its impact.

(Views are personal; the author is Joint Chairman and MD, BajajCapital)