Terror insurance: Does your policy cover you?

If you've been thinking of buying insurance, then there's probably one more point in your checklist now - check for terror insurance cover.

Clearly, with the increase in terror attacks and the manner in which they have started to happen in the midst of our everyday lives, inside our homes and indiscriminately on the streets, people are running for cover. And insurance companies are indeed offering this cover.

Life and health policies: Inbuilt Cover!

In life and health policies, most insurers cover terrorism risks. So family members of policyholders would get the benefits of the life insurance policy in case of death or injuries caused due to a terror strike.

Home insurance: Optional cover!

However when it comes to insuring your home, some insurance companies offer it at an additional cost whereas others don’t offer at all. That is, if your home is gutted in a fire caused by a terror strike (officially recognized by the government as a terror strike), you will get the insurance amount only if you have bought the add on cover.

Rajeev Kumaraswamy, Head – Reinsurance, ICICI Lombard explains, "In all our personal line products, that is health and accident insurance, this cover is inbuilt. However for householder’s policy and corporate covers, this is an add on cover. It is an option we would like to give to our customers. There maybe clients who perceive a risk and others who don’t. Hence we do not want to force anything on the clients."

Once a policy is bought, you cannot add terrorism cover later. So, it’s best that you also enquire about terrorism cover while buying insurance.

Here is a look at some of the household covers offered by various companies:

ICICI Lombard

At additional cost

Royal Sundaram

Excluded

New India assurance

Inbuilt in policy

Bajaj Allianz

At additional cost

Oriental insurance

Not Covered

United India insurance

Not Covered

National insurance

Not Covered

Standalone terror cover?

As of now, insurance companies do not offer separate cover for terrorist attacks. However there are attempts to create such a product because there appears to be a need.

In early July this year, Optima Insurance Brokers , in association with New India Assurance, offered one lakh free insurance polices of Rs 1 lakh each to cover lives against terrorist attacks. The initiative was an attempt to raise awareness about insurance coverage.

Unfortunately, within weeks after this offer was announced, blasts rocked Bangalore.

“The response was overwhelming,” says Rahul Aggarwal, head of Optima insurance brokers. “We launched this scheme in the second week of July and by the end of July, more than 8,000 people had applied for and got the policy.”

So currently this is the only form of 'pure terrorism cover' available in the market right now. The two companies say that once the free offer period is over, the cover will be available for as little as Rs 100 per year for a Rs 1 lakh cover.

So when you are shopping for insurance, make sure you check about the terrorism cover right upfront.

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