In recent times, the average Nepalis have poured in their lifetime savings into building their houses with latest amenities and additional millions in furnishing them for utmost comfort and graceful living. Unfortunately, most of the owners still continue to ignore the importance of home insurance and do not pay attention to secure their tangible assets from natural calamities and disasters. The negligence of the government and concerned stakeholders in alerting the public about the prudence of acquiring home insurance is attributed for the precarious situation.

Though the loss of human life can never be compensated, the financial blows from unexpected tragedy can easily be refunded by getting timely insurance. The insurance companies do offer insurance premium in household segment — the fire and allied perils — however, majority of the population are unaware about such general insurance. Household policies cover accidental damage to buildings and its contents by earthquake, landslide, vandalisation and others. Such policies also insure household goods, furniture, furnishings, appliances, clothing, valuables, interior decorations, personal effects and money.

Besides natural disasters, the packages also refund the risk of burglary or other damages due to fire and short circuiting. “Though home insurance covers what is possibly one of the costliest assets of Nepali, very few of them or almost negligible segment understands this and takes steps to cover the unforeseen risks,” says Chunky Chhetry, deputy general manager of Sagarmatha Insurance Company Ltd. Chhetry believes that along with the government, insurance companies are also way behind in organising campaigns and awareness programmes. “Despite the premiums being very low for general insurance, people are still very reluctant to go for it,” says Chhetry, adding that people are yet to warm up to adopting them.

Nepal’s geographical features and climatic conditions make it vulnerable to catastrophic natural calamities, whereas Kathmandu is ranked as one of the most earthquake susceptible zones around the world.

Though business complexes, industrial infrastructure, construction companies’ projects are commercially insured as they have to work in collaboration with other stakeholders such as banks and other financial institutions, general residencies are lagging behind in the insurance sector. “It is mandatory for construction companies to insure before commencing any projects.

Beside the financial issues, it also secures the infrastructure and property from in case of any untoward incident,” says Prakash Bajracharya, director of Shangrila Housing Pvt Ltd.

Talking about the general residences, Dr Uttar Kumar Regmi, chief of disaster management at Kathmandu Metropolitan City Office, says, “In absence of mandatory policy of the government for insuring general residences and lack of effective programmes from the concerned authorities, valuable properties are at risk.” Regmi feels that it is high time for government to formulate policy and implement it to ensure the security of the residents.

However, Regmi states that people have serious doubts regarding insurance companies and adds, “The process of claiming is very lengthy and cumbersome and this could also be one of the reasons of not taking up the insurance seriously.” Nonetheless, Regmi is optimistic about the fact that people are gradually turning towards life insurance and hopes the pace will pick up slowly for the property insurance as well.

But, Sachendra Manandhar, assistant general manager of Alliance Insurance Company Limited, opines, “Along with life insurance packages, people are also slowly but surely opting for property insurance, which is definitely a positive sign — though more homework is required to ring in the owners in the insurance pool.” Insurance experts, on the other hand, believe that the concerned authorities are not doing enough — if at all — to secure the tangible assets of the general population. “The major drawback in the insurance sector is that even the government officials are negligent about the insurance policies. If only the government had encouraged this sector as the banking, it would have benefited not only the insurance sector but the general mass as well,” says insurance expert requesting anonymity. He added that since property insurance can be acquired at very nominal cost, even insurance companies are only focused on life insurance, which requires higher investment.

source: The Himalayan Times, 2 March 2013