Householder’s insurance still unpopular

Householder’s insurance still unpopular

RICBL says even a spoon can be insured

Heavy rainfall in the second week of July, which triggered flash floods in the early morning of July 13, affected five buildings and 10 tenants of the National Housing Development Corporation Limited (NHDC) in Phuentsholing. Victims lost everything. While the victims thought they would be compensated, the NHDCL said that the people had not insured their properties, due to which compensations cannot be provided. This has brought to light a fact most are either not aware of or not interested in – Royal Insurance Corporation of Bhutan Ltd’s (RICBL) House Holder’s Insurance, which compensates people who have bought the product.

Under this product, there are premiums that cover fire and allied perils including earthquakes, burglary/housebreaking, and personal accidents. Premiums under the category have three plans of sum insured; plan A for fire and allied perils including earthquake is Nu 100,000 per household. It will cover personal effects and furniture, fixture and fittings.

The sum insured for items covered in plan B (fire and allied peril insurance) is Nu 200,000 and the sum insured for plan C is Nu 300,000.

In burglary and housebreaking premiums, the sum insured for plan A is Nu 25,000 and Nu 50,000 for plan B while it’s Nu 75,000 for plan C. The insured sum will cover personal effects in houses.

In the personal accident subsection, Nu 50,000 is the capital sum insured in plan A and Nu 100,000 in plan B while it’s Nu 150,000 in C. The premium payable in plan A is only Nu 635 per annum in all householder’s insurance schemes.  The premium payable for plans B and C is Nu 1,270 and Nu 1,905 respectively.

The above plans cover the items one would have in a home. The contents of a home comprise things one owns in and around the house. Personal belongings include clothing, electronics, expensive jewelry, furniture, utensils, and anything movable, including even simple utensils like spoons.

The premium received by the RICBL for this product in 2020 was Nu 415,009 with the sale of 436 policies. No claim was made during the year. 121 policies were sold in 2021 accounting for Nu 141,540 as premium. With a single claim from Phuentsholing, the amount claimed in the year was Nu 40,302.

In 2022, RICBL received a premium of Nu 106,429 selling 86 policies. For 2023, until  July, the company could sell only 45 policies receiving Nu 54,231 as a premium.

Statistically, it is observed that householder’s insurance products have not attracted people in 47 years, though the Corporation has been fulfilling the insurance and financial needs of the people of Bhutan. Insurance policies have provided the much-needed security and protection to lives and property against often devastating unforeseen hazards.

While it may be taken as a failure on the Corporation’s part to create awareness among the public, the General Manager of the General Insurance Department, Kinga Thinley, said that people are not interested in buying the product.

The GM said that despite the Corporation educating and creating awareness of the premium products through different platforms, the trend is still not picking up. He said that the Corporation had approached institutes like the Armed Forces, schools, and monasteries to benefit them but, “not much interest was shown.”

An official from RICBL said, “Insurance is no longer an option. All need to insure for one’s protection and coverage in the future.”

Interested individuals can register and claim the products from the RICBL electronically. A proposal form, items to be insured and a Citizenship Identity Card number are all that are required.

Meanwhile, taking lessons from the property damages in Phuentsholing NHDCL, RICBL is going to look into insurance schemes for flood, windstorm, and other disaster-related damages.  The RICBL will have to seek approval from the Royal Monetary Authority.

Those affected tenants of NHDCL by flash floods in Phuentsholing were not compensated, saying that nothing can be given as the affected ones had no insurance on the lost properties.

Sangay Rabten from Thimphu