Which Insurance you should take for protection during monsoon? 

With the monsoon on the dock, it is that time of the year when we encounter floods, humidity, and damage to our assets. Slips and falls whilst on our bikes become more common. Of course, one can not rule out the runny nose, malaria, dengue, other mosquito-borne diseases, and other water-borne illnesses. There are many risks to worry about; how about hedging these risks and ensuring a peaceful monsoon with a cuppa hot tea! Here we look at those aspects against which you can easily avail yourself of coverage. 

Key Takeaways

• The CPA Mandate: Under the Motor Vehicles Act, a ₹15 lakh Personal Accident Cover is legally compulsory for vehicle owners in India, unless they already hold a standalone accident policy of equivalent value.

• Engine vs. Water Dilemma: Standard motor insurance excludes engine damage caused by water ingress. Drivers must secure a Hydrostatic Lock Add-on to cover damage caused when an engine tries to compress water instead of air.

• Comprehensive RSA Networks: Roadside assistance riders eliminate the vulnerability of being stranded by providing towing services, alternate transit, and emergency accommodation if repairs take significant time.

• Customising Property Shields: Base property insurance plans often exclude water damage from flash floods. Insurers require a specific STFI (Storm, Tempest, Flood, and Inundation) wrapper to cover structural seepage or stock spoilage.

• The Vector-Borne Threat: Monsoon-driven illnesses like Dengue and Malaria require quick clinical intervention. Integrating these into a comprehensive health framework ensures quality care and covers elaborate inpatient costs.

• Tax Incentives for Health: Unlike personal accident or property premiums, health insurance plans covering monsoon illnesses offer active financial deductions up to ₹25,000 under Section 80D of the Income Tax Act.

Personal accident cover

Riding your bike during the monsoon comes with the risk of slipping and falling. This could, in turn, lead to accidents or, in some cases, events of electrocution. Insurance coverage offers coverage to the insured or beneficiary in the event of death, disability, or injury of the policyholder or the 2-wheeler owner.

A personal accident cover under the motor insurance policy will provide compensation cover for:

• Any physical injury,
• Death or
• A disability that occurs as a result of an accident.

The overall limit as stipulated by IRDAI is Rs. 15 Lakhs. 

Up until 2019, only third-party liability cover was necessary for India while purchasing a bike. However, with effect from January 2019, buying a Personal accident cover is compulsory under the Motor Insurance Act of 1988. The exemptions for availing of personal accident cover are as mentioned below:

• If the owner of the vehicle already has a stand-alone accident cover with a sum insured of Rs. 15 lakhs, then the applicant need not avail of any personal accident cover separately.

• If the owner of the 2-wheeler already has a policy with personal accident coverage for an existing vehicle (2-wheeler or car), then he need not buy another one just for the new vehicle.

Personal accident insurance cover can be bought alongside third-party insurance (which is mandatory as well). Alternatively, you can avail of it as part of the comprehensive coverage, which offers wide coverage against damages and untoward incidents.

Benefits of personal accident cover

The incidence of accidents has been on the rise, especially in the case of 2-wheeler accidents. Past data indicate that the chances of death/permanent disability due to the accident are significantly higher in the case of 2-wheeler accidents. Here are some benefits of availing a personal accident cover:

• Financial assistance to the insured to ensure that he/she can avail of the right medical treatment. This rider would pay for all associated expenses as well. Expenses such as hospital bills, medical expenses, and post-accident treatments (if any,s uch as physiotherapy, etc) are covered.
• The compensation would also help the policyholder cope with the loss of income due to an accident that results in permanent disability.
• In the event of an unfortunate death, the beneficiaries can use the funds to meet financial obligations. 

Roadside Assistance 

The worst that could happen to you on a road trip is that your bike fails in the middle of nowhere. However, just like Murphy’s law, which states, “Anything that can go wrong will go wrong”, this is the principle that you should implement whilst availing of insurance coverage.

This particular feature of general insurance is getting popular as the policyholder will get assistance in the event their bike (or car) breaks down. The insurer will send in assistance immediately. The coverage will include minor repairs, towing, etc. This can be availed as an add-on cover under your comprehensive motor insurance coverage.

Benefits of roadside assistance coverage

Roadside assistance comes with an additional set of features that prove to be beneficial, especially if you travel along paths with a lower population and no immediate assistance. The coverage includes claims against:

• Accommodation in the event the breakdown is severe, and the repair may take considerable time, the insurer will bear the cost of hotel accommodation.
• You may be required to avail yourself of alternate transportation if the repair would take longer than reasonably expected.
• Or you need to tow the vehicle for more sophisticated tools necessary for the repair work, so that the vehicle comes back to its original condition. The Roadside Assistance Add-on Cover provides this benefit as well.
• Often, the breakdown would be for any minor defect; however, a repair shop or mechanic may not be within reach. This insurance offers coverage for such minor faults as well. There is also guidance given over the phone in case you want to fix the vehicle yourself instead of waiting for a mechanic to seek assistance. 

The coverage under this plan includes engine breakdown, flat tyre, minor repairs, empty tank, spare key assistance, and towing, etc. There is a cap on the total number of times that you can use this assistance as per the norms mentioned in the policy documents. The assistance is available for the insured vehicle alone and only at a place where there is no other option nearby. 

Hydrostatic lock coverage

One common effect of heavy rains or flooding in India is that water can seep into your bike’s engine and prevent your vehicle from starting. A hydrostatic lock occurs when you drive the vehicle after the water has seeped into the engine. This could also occur whilst riding your bike on a heavily flooded, waterlogged road.

It is important to note that hydrostatic lock occurs only when the engine is running and the water seeps in whilst the engine is on and the vehicle is wading through a water-logged area. It does not occur when the bike is stationary, and the water seeps into the engine. There is a high possibility in this scenario that the bike may fail to start and would require mechanical assistance. In both cases, it is important to reach out to a professional mechanic who will help you move the vehicle from the waterlogged area with minimal damage to the engine. This work is often done manually.

Benefits of hydrostatic lock coverage:

• Roads in India often get flooded when water enters the engine whilst on the road. The pistons try to compress the water instead of the air. The opposing force may lead to severe damage to the engine, and this could even lead to a replacement of the engine or components of the engine. This cover will help bear the cost of such an engine or component replacement.
• It is available as an add-on cover if you stay in an area where waterlogging is frequent, or if you need to travel during the rains in such areas, then you should consider availing of this add-on.
• The plan also offers coverage for minor expenses incurred to seek professional assistance to tend to the hydrostatic lock.

Insurance for property coverage

If you transit goods during the monsoon, there is a high chance of damage or spoilage (depending on the type of goods) due to flooding, humidity, and other factors.

A property insurance policy offers a wide range of coverage. It covers damage to the insured property due to:

• Wind,
• Fire,
• Rain,
• Snow,
• Smoke, or
• Lightning etc.

Property insurance is often an umbrella package that offers multiple add-ons based on your coverage requirements. The base policy may not cover damage due to water flooding, seepage, tsunamis, cyclones, etc.

Other exclusions include earthquakes, moulds, and acts of war like terrorism, etc. There is specific flood insurance available that protects individuals against the loss of goods against flood. Similarly, there is earthquake insurance that offers coverage against goods damaged during an earthquake.

Benefits of insurance against property damage

• Offers coverage against possible income loss due to damage to the property.
• Enables the usage of the compensation to restore the damaged property in its original form if possible.
• Or replace it with an alternative to ensure the continuation of required operations.
• It provides mental peace to the owner of the property as it ensures that any damage due to weather conditions will be compensated.

Property insurance is highly customizable in today’s times. You can avail of coverage on your property, which is likely to be transported or held in a single place depending on the requirement. 

Vector-borne illnesses or diseases

There are specific illnesses that occur during monsoons with greater frequency than others.  Dengue, Malaria, Japanese encephalitis, kala-azar, lymphatic filariasis, and chikungunya are monsoon-driven, mosquito-induced illnesses that require hospitalisation and immediate medical assistance. There are other infections such as Zika, Nipah, typhoid, haiza, etc., where the treatment could be elaborate. It may include hospitalisation as well.

Monsoon is also that time of the year when we suffer from influenza, COVID, frequent colds, and sore throat, which require OPD expenses and often lab tests. You can avail of coverage for vector-borne diseases.

WHO Definition of vector-borne illnesses:

As per the WHO definition, vector-borne diseases are illnesses that affect humans. These diseases that vectors can transmit are caused by bacteria, viruses, or parasites. The coverage for vector-borne illnesses comes as part of the health insurance plan.

Benefits of vector-borne disease coverage:

• Enables availing quality treatment without worrying about the expenses you would incur.
• With the pandemic, it has become extremely important to plan for the worst case. Many individuals found that their health insurance plans fell short when they had Covid-related hospitalization; which led to a lot of financial stress.
• Health insurance, including vector-borne diseases (or otherwise), will offer tax benefits under section 80D. The premium paid is tax-deductible up to Rs. 25,000 for yourself and your immediate dependent family. 

Summary Table: Monsoon Risk Management & Insurance Solutions

Conclusion

It’s in your hands to make the most of the monsoon. Like all other insurance, it is advisable to assess your insurance requirement and compare across products to avail plans which align with your requirement.

SecureNow platform helps identify risks possessed by individuals or firm owners. It provides a comparison of the best protection plans to choose from that fit their requirements.

Frequently Asked Questions (FAQs)

1. Is personal accident cover compulsory for two-wheeler insurance in India?

A) Yes, under the Motor Vehicles Act and IRDAI regulations, a Personal Accident (PA) cover with a sum insured of ₹15 Lakhs is mandatory for owner-drivers. However, you can be exempted from buying this cover with a new policy if you already hold a standalone personal accident insurance policy of ₹15 Lakhs or possess an existing PA cover attached to another vehicle in your name.

2. Does comprehensive bike insurance cover engine damage due to waterlogging?

A) No, standard comprehensive two-wheeler insurance policies do not cover engine damage caused by waterlogging known as a hydrostatic lock. If you crank or drive the bike through a flooded street and water enters the engine, the repairs are classified as consequential damage and rejected. You must purchase a specific Hydrostatic Lock Cover or Engine Protect Add-on to safeguard against this risk.

3. What is covered under the roadside assistance add-on in two-wheeler insurance?

A) A roadside assistance (RSA) add-on provides immediate emergency help when your vehicle suffers a mechanical breakdown or a flat tyre on the road. The coverage includes towing services to the nearest workshop, minor on-site repairs, fuel delivery, spare key assistance, and, under certain policy terms, alternate transportation or hotel accommodation costs if you are stranded far from home.

4. How can commercial properties protect stock from flood damage during the monsoon?

A) To protect commercial assets and warehouse inventory from rain and flood damage, business owners must ensure their Property Insurance Policy includes an add-on for STFI (Storm, Tempest, Flood, and Inundation). The base property policy typically only covers fire and lightning, meaning specific water-damage riders must be explicitly included to secure a valid claim for spoiled goods.

5. What are vector-borne diseases covered under health insurance policies?

A) Vector-borne diseases are illnesses transmitted by vectors such as mosquitoes, ticks, or parasites. Under standard health insurance plans, illnesses like Dengue, Malaria, Chikungunya, and the Zika virus are covered, provided the treatment requires a minimum of 24 hours of inpatient hospitalisation. Outpatient diagnostic lab tests or medicines are only covered if the plan includes an OPD expenses extension.

6. Can I claim income tax benefits on premiums paid for monsoon insurance covers?

A) Tax benefits are selectively applied depending on the type of insurance plan purchased. Premiums paid for Health Insurance Policies (including vector-borne disease coverage) qualify for tax deductions up to ₹25,000 under Section 80D of the Income Tax Act. However, premiums paid for motor vehicle policies, standalone personal accident coverage, or commercial property insurance do not offer any income tax deductions.

Written By- 

Gunjan Saxena

MBA Insurance Management

With a robust background in the insurance industry, Gunjan is a seasoned professional who brings 10 years of expertise to group personal accident insurance. Throughout her career, she has demonstrated a deep understanding of the intricacies and nuances of insurance products, particularly in personal accident coverage. Having worked closely with both individuals and businesses, she has gained valuable insights into the diverse needs and challenges faced by clients seeking insurance protection. Her experience encompasses designing tailored insurance solutions, providing expert advice, and guiding clients through the insurance process with confidence and clarity.

Through her articles, Gunjan aims to educate and inform readers about the importance of group personal accident insurance and the benefits it offers in safeguarding against unforeseen events.