The insurance regulator - Insurance Regulatory and Development Authority of India (Irdai) - has asked the non-life insurers to guide policyholders on the necessary steps needed to be taken by them so as to avail uninterrupted coverage. The insurers have been advised to inform their policyholders on how relevant clauses of Standard Fire and Special Peril policy and others would apply after May 3, so that they can avail uninterrupted coverage of their policy.
The non-life insurers decided to give a one-time relaxation to policyholders whose property has remained un-occupied and who are at risk of losing their coverage due to the nationwide lockdown imposed by the government by extending coverage of their policies to May 3.
The General Insurance Council (GI Council) in a statement had said, policyholders whose property is unoccupied on or after March 25- April 3 shall be deemed to be covered subject to the policy being in force.
On Thursday, the insurance regulator welcomed the decision of the non-life industry and said the gesture of giving a one-time relaxation for the properties unoccupied during the national lock-down period between 25th March and 3rd May, 2020 is in the interest of policyholders, given the current unprecedented situation.
“The insurers have also been advised by the authority to continue to engage with their policyholders and give them the necessary guidance regarding the policy conditions in general that may get attracted during the lock-down or immediately thereafter," Irdai said.
“They should communicate directly with the policyholders through email, SMS or other digital means in clear and simple language advising them well in time on the action to be taken by the policyholders for ensuring uninterrupted coverage in all their insurance policies," it added.
Standard Fire and Special Peril policies, commonly known as property insurance policies, have a clause that says if an insured property remains unoccupied for a period exceeding 30 days then the coverage ceases to exist unless the insurer’s consent is obtained in advance.
Due to the lockdown in place, the properties of policyholders have remained unoccupied for a period of over 30 days thereby putting many at risk of losing their coverage. However, the insurance regulator has decided to provide a one-time relaxation to the policyholders and continue their policies.
“The policyholders in turn are requested to read the terms and conditions of their insurance policies carefully and be aware of the policy requirements in case they or their insured properties are located in areas where there could be prolonged restriction of movement”, Irdai said.