A group representing insurance brokers has written to the regulator expressing its concern about the companies likely withdrawing coverage for properties due to the nationwide lockdown to contain the coronavirus.
Property insurance policies usually have a condition that says if an insured property remains unoccupied for a period exceeding 15 days or 30 days then the coverage ceases to exist unless the insurer’s consent is obtained in advance.
“Policyholders are concerned that since they are simply complying with the government imposed lockdown and not willfully keeping properties unoccupied, the withdrawal of cover or imposition of new onerous conditions and warranties for continuity of coverage is unwarranted,” said the Insurance Brokers association of India (IBAI) to the Insurance Regulatory and Development Authority (Irdai)
The letter said that insurers, based on the guidance note received from the GIC Re, the largest reinsurer in the country, have advised policyholders that continuity of cover is subject to compliance of specified conditions during the lockdown and prior written approval of insurer needs to be taken for continuity of cover.
GIC Re, in a letter to the General Insurance Council (GI Council), has said retail or small businesses with an insured assured up to Rs 5 crore can be shown leniency and allowed continuity of cover for unoccupied premises up to May 3 or till such time as the lockdown is extended without insurer’s consent.
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