Following the massive loss of life and property in the Bhotekoshi disaster, public interest in insurance-related issues has increased. What is the process for life and non-life insurance policyholders to file claims? What roles should insurance companies and government agencies play in ensuring smooth and speedy claim settlements? Kantipur Television’s Matrika Subedi put these and other questions to Purna Bahadur Thapa, deputy director at the Nepal Insurance Authority. Excerpts:
Following the floods, non-life insurance companies alone have received claims worth more than Rs26 billion. How long will it take for policyholders to receive their payments?
Although the Insurance Act provides for a two-month period for claim payments, the authority has introduced a simplified procedure for major disasters. Under this provision, claims can be settled more simply and conveniently on the basis of minimum required documents. Insurance companies can also provide advance payments of up to 50 percent of the assessed loss.
What is the estimated insurance claim from the Bhotekoshi disaster, including both non-life and life insurance? It is not possible to say exactly how much the damage caused by the Bhotekoshi floods will amount to. However, according to preliminary data received from non-life insurers, the damage is estimated at around Rs26 billion. Data on accident and life insurance claims from various institutions is still being collected. Therefore, the total insurance claim amount is likely to increase.
How should the importance of insurance be understood in the context of disasters such as the Bhotekoshi floods?
The importance of insurance becomes more apparent after disasters such as floods, landslides and earthquakes. However, insurance should not be viewed merely as a means of receiving money after a loss occurs. It should instead be understood as an important instrument for risk transfer, financial recovery and strengthening the socio-economic system.
In Nepal, there is a tendency to realise the need for insurance only after a disaster occurs. What prevents people from taking insurance before a disaster strikes?
The general public has realised the need for insurance, but many people remain uninsured because of a lack of awareness about insurance and insufficient knowledge of insurance policies. Conscious citizens, however, are already insuring their properties.
As the risk of natural disasters increases, what needs to be done to increase awareness about insurance?
Taking insurance means protecting one's property and having a means of receiving compensation for losses caused by disasters that may occur in the future. A culture of insurance can be developed by increasing public awareness, educating people on insurance policies and making insurance services available through digital platforms.
What types of insurance are available in Nepal to cover losses caused by disasters?
Property insurance policies can provide protection against disasters such as floods, landslides, earthquakes and fires. The terms, conditions, benefits and exclusions are specified in the respective insurance policies.
What process should policyholders follow to file a claim and receive payment?
The insured must inform the insurance company about the damage to the insured property through any available means. Once the insurance company receives the information, it must appoint a surveyor. The surveyor is required to assess the damage and submit a report within 15 days. Based on that report, the insurance company must make the payment within 35 days.
What documents are required to file a claim?
For non-life insurance claims, the required documents generally include the original insurance policy, an incident report, a police report and the surveyor's report. However, if any of the documents have been destroyed, the claim is assessed based on the circumstances and extent of the damage.
What should insurance companies do to speed up damage assessments and claim settlements during a disaster?
During a disaster, insurers should simplify and digitise the entire process, from preparedness to claim settlement, to ensure speedy claim payments. With the objective of making the claim settlement process faster, more efficient, transparent and systematic, the Nepal Insurance Authority has issued the Insurance Claim Payment Guidelines, 2081.
What type of insurance provides compensation if a vehicle is swept away or damaged by a flood? Is there insurance coverage if a business is forced to shut down and loses income?
If a vehicle is swept away or damaged by a flood, a motor insurance policy provides compensation for the resulting loss or damage. Compensation is also available if a business is forced to close and loses income because of a flood. For such risks, a loss of profit insurance policy must be taken.
What role does insurance play when floods damage farmers' crops, livestock and agricultural businesses?
When floods cause damage to farmers' crops, livestock or agricultural businesses, claims are settled on the basis of the insurance policy, photographs and videos, and the report prepared by the loss assessor.
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