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N.S. Vageesh

Chennai , Jan. 7

TSUNAMI may be a household word today, but, a fortnight ago, you might not have heard of it. Neither had many companies.

Naturally some of them had not taken insurance cover for the disaster that struck them on December 26. They would still be compensated by insurance companies — provided these companies had taken cover for both earthquake and STFI (Storm, Tempest, Flood, Inundation) under fire policies.

Insurance companies are at present assessing the claims from a couple of companies, few resorts and hotels on the coast.

Both covers (STFI and earthquake) have to be taken if property damage claims are to be settled, said a United India Insurance official. He added that it was also possible that a couple of companies had opted out of earthquake or the other cover to cut premium costs earlier.

Earthquake cover costs about 10 paise per Rs 1,000 property value in the least dangerous seismic zones in the country and can go up to Rs 1 per thousand in the highest danger zones.

Why should companies have taken an earthquake cover, when the damage was caused by flood/inundation by seawater? Officials say that in the event of such disasters, they trace the source of the risk. In this case, insurance officials say that earthquake was the proximate cause of the tsunami. "The chain of events set off by the Indonesian earthquake led to an unbroken sequence culminating in the wave which affected a few companies. Unless they have taken the earthquake cover also, we will not be able to settle their claim," said officials from United India Insurance Company and Oriental Insurance Company.

However, in the case of personal accident policies and motor vehicle policies, the covers are in-built. "There ought to be no problem in settling these cases. We have simplified procedures to settle any claims on these fronts on a war footing," an official from Oriental Insurance company said.

Asked whether there would be an inclusion of tsunami in future risk covers, the official said that it was up to the Tariff Advisory Committee to decide on policy matters.

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