Tremors hit PSU insurance cover

Guwahati, Sept. 24: Four public sector insurance companies have decided not to accept new proposals for earthquake cover in the wake of successive tremors that have hit the Northeast recently and particularly after the one on Friday which reportedly left cracks in several buildings.
The insurance companies, which took the “collective” decision yesterday, said it was a temporary measure as there were apprehensions of more tremors in the highly seismic zone.
The chief regional manager of Oriental Insurance Company, B. Basumatary, told this correspondent that all the companies had agreed that caution was the need of the hour. “We are, after all, a commercial organisation, and just as we have the right to accept business, we also have the right to refuse, depending on the situation,” he said.
Basumatary said the decision was based on the premise that the probability of more earthquakes occurring in the region was high. “Insurance is against uncertainties,” he said, adding by way of example that when floods become a certainty, insurance covers against this natural calamity are also not given. Earthquake cover is an add-on with other covers and is given at an extra premium.
The companies are also apprehensive of foul play if earthquake insurance cover is given at this juncture. “For instance, a building may have developed cracks in the last earthquake and its owner takes out a policy now. He can make a claim even after a mild earthquake in the future, saying his building has just been damaged,” Basumatary said.
“All inspections cannot be foolproof and the business of insurance also rests on a key principle of utmost good faith,” he added.
The chief regional manager of New India Assurance Co Ltd, K.C. Hessa, said he had sought suggestions from the company’s headquarters in Mumbai about the scenario in the region. “The company has temporarily stopped accepting new proposals. But the existing customers will not suffer and the company will renew their insurance cover on earthquakes,” he added.
B.K. Kakoty, the chief regional manager of United India Insurance Co Ltd, said the company had stopped accepting proposals from those living in apartments where cracks had reportedly developed because of the September 21 quake. “We are watching the scenario and will not accept any new proposal for a certain period. I have written to the company headquarters in Chennai about the scenario in the region following the recent earthquakes.”
D.R. Sarkar, the chief regional manager of National Insurance Company, said there could be a “case to case” consideration. The company, being a commercial organisation, has to consider its interests, he added.
The Assam Real Estate & Infrastructure Developers Association today said more than 80 per cent of the highrises here were safe and capable of withstanding high intensity earthquakes. Its president, P.K. Sharma, said the highrises had been constructed according to the codes of the Bureau of Indian Standard and would not collapse even if a high intensity quake hit the region.
Chief minister Tarun Gogoi said the state was prepared to tackle any situation in case of a quake. The government will create a single agency to give permission to construct highrises here and keep vigil on quality construction.