Joshimath Ground Report: Victims demand loan moratorium; Denied Insurance Claims

“We followed every single parameter while building this guest house. We had got the approval of the administration. But no one is helping us to vacate the house.”

“We went to the State Bank of India (SBI), asked for a loan moratorium, but were denied. Banks and insurance companies told us nothing could be done unless their roof fell,” Pawar and his said the wife, while tears rolled down her cheeks.

in Joshimath, there are around six to seven banks, which include public sector banks and corporate banks. Like Pawar, there are many businessmen, restaurant owners and shopkeepers who have taken loans running into lakhs from banks and are paying premiums to several insurance companies.

Atul Shah, another victim of the landslide, seen with luggage near the Bolero car, said, “I am leaving the city as there is nothing left here. I am going to Dehradun in search of a safe accommodation for my family.” ” He says he has an emergency fund of six months and a loan of Rs 2000 10 lakhs as soon as he wipes his cheeks.

“I don’t understand why we are not getting relief from the banks. So many people have loans to pay, but when our sources of income have collapsed,” Shah questioned in an angry tone. So how will you pay the banks?” Government.

Chief Minister of Uttarakhand Pushkar Singh Dhami On 11 January, announced interim assistance for affected people seeking compensation. CM Dhami has said that compensation will be given according to the market rate, which will be decided after taking all the stakeholders into confidence. on wednesday Government of Uttarakhand announced interim assistance of 1.5 lakh to the victims

Mint spoke to some insurance experts to understand the criteria for claim settlement in case of land subsidence. And, if the government demolishes a building due to safety issues, the insurers are liable to pay.

expert opinion

Is land subsidence covered under insurance?

Anil Verma, Managing Director, Construction and Property Insurance, Howden Insurance Brokers India said that land subsidence is a standard cover available under various property policies in India such as Standard Fire and Special Perils Policy, India Home Defense, India Small Enterprise Security, and India Micro Enterprise Security Policies, This subsidence leads to general cracking, settlement or bedding down of new formations caused by river/coastal erosion or earthworks or excavations. Such damage to buildings due to subsidence is covered under insurance policies.

Verma said, “For any loss to be payable under insurance, the insurer needs to prove the proximate cause of such subsidence. In such loss, surveyors are appointed by the insurers who ‘act’ Helps to find out the cause of subsidence by considering ‘God’, Distress, Excavation, Tunneling or Erosion of River Banks or Movement of Remaining Ground”.

On what basis can the claim settlement be done in case of home insurance?

Insurance Regulatory and Development Authority of India (IRDAI) has standardized the home insurance product called Bharat Griha Raksha Bima. It is a comprehensive product that provides various covers for landslides, subsidence, flood and malicious damage.

Verma said, “The cost of reconstruction of the building is paid up to 20% of the sum insured in addition to the cost of material repairs, subject to a maximum of Rs. 10 lakhs, if selected”.

If the government declares a building as “unsafe”, in such cases, are the insurance companies liable to pay the amount to the policyholder?

Gurdeep Singh Batra, National Head – Retail Non-Motor Underwriting, Bajaj Allianz General Insurance told Mint that in the current case of landslide in Joshimath, it is covered under the India Home Defense policy as a peril covered under the policy Is. However, there is a caveat. If the Government orders demolition without any damage from the perils covered under the policy, the same may need to be reviewed in the light of Government notification, if any.

In the event of extensive cracks and damage to buildings in Joshimath, the Government declares the building unsafe for habitation or endangers the lives of others, issues a notification specifying such hazard covered under the policy. In this case, the insurers will be liable to pay based on the assessment.

Amit Ganorkar, President and Chief Operating Officer, Tata AIG General Insurance Co. Ltd., told Mint, “If the insured house suffers direct physical loss or damage due to subsidence of the ground on which the building stands, Tata AIG home insurance Coverage will be provided under the policy.

Ganorkar said, “The home insurance policy includes coverage for physical damage caused directly to the insured house due to subsidence and landslide/rockslide. Other condition will not be covered.”

According to Verma, insurance companies play an important role in compensating for the losses to the insured structures, which are caused by such ‘Act of God’ risks. “For all insured properties, insurance companies pay for the expenses incurred by the insured for demolition, removal of debris and reconstruction of their damaged homes. Covers are available with insurers for loss of revenue due to such incidents. However, in a situation where the policyholder has died, his legal heirs have the right to claim the damage caused to the insured property.”