Planning to buy property in Uttarakhand, Noida, Surat, Jamnagar, the Sunderbans or Darjeeling? You may soon have to shell out higher premiums for insurance against property damage in these places.

The country’s re-insurer General Insurance Corporation (GIC Re) is in the process of preparing a “hazard map” to identify areas that are more prone to natural calamities such as earthquakes, cyclones and landslides. GIC re-insures those risks underwritten by insurance companies. The map, once ready, could be used by insurance companies to either charge higher premiums for properties located in risky locations or limit their exposures in such locations.

According to Chairman and Managing Director, Ashok K. Roy, the reinsurer would insist on proper implementation of the codes for construction in disaster-prone areas to avoid devastation.

“Kedarnath is a wake up call. Nature has its own way of dealing with things. We have to learn to live with hazards and natural disasters,” Roy told newspersons on the sidelines of an insurance summit organised by the Indian Chamber of Commerce, here on Saturday.

While insurance firms already take into consideration the risks involved in covering high value properties in “hazardous areas”, a map is expected to further facilitate the process. “The premium for insuring properties in those areas may be higher and there could be a mechanism whereby insurance companies can refuse claims if the insured does not follow rules,” he said. The idea was on the drawing board stage for quite some time; however, the implementation happened recently. GIC Re has engaged an external research team that is working along with ISRO to prepare the map. “It might take about six months to prepare the map.” Based on the preliminary survey, there is a concentration of high value properties in various “hazardous” areas of Noida, Surat and Jamnagar. Certain areas of Sundarbans and Darjeeling also fall into the category, he said.

>shobha.roy@thehindu.co.in

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