Dechencholing residents confront insurance challenges after devastating flood, a lesson learned otherwise
In the wake of the catastrophic flood that struck Dechencholing satellite town on August 10, 2024, many residents find themselves grappling with the aftermath and an uncertain future. While some flood-affected families were aware of insurance options that could aid their recovery, others were left in the dark about such policies, purely out of ignorance or gross negligence from their side.
The Ministry of Home Affairs (MoHA) reports that out of 22 affected huts in the region, 14 suffered damage, one was completely washed away and eight remained unharmed.
Tshewang Lhamo, a 56-year-old flood survivor, experienced the loss of her temporary hut to the floodwaters. She recounts, “I visited both the Thromde Office and RICBL, but they informed me that I cannot file an insurance claim for a temporary hut.”
The flood also disrupted local transportation significantly. Out of 32 vehicles stranded, an Alto was submerged, and an Eco Versa was completely washed away. Kinley Wangmo, the owner of the washed-away vehicle, laments, “It’s devastating to lose my car, but what’s more frustrating is that I can’t file a motor insurance claim because my policy falls under the 3rd party category.”
Similarly, Tenzin Phuntsho, a tailor who had recently purchased a second-hand Hyundai Tucson with borrowed funds, now faces a severe loss. The vehicle, which had been in his possession for only three months, was damaged beyond repair.
“Despite the swift relief operations from His Majesty and other agencies, which have been incredibly supportive, I wish insurance companies could consider my situation. My car was damaged due to circumstances beyond my control, not through any fault of mine or a third party,” he explains.
Local authorities and the Home Ministry highlighted that two households in Changtagang were particularly hard-hit, with their ground floors inundated with mud and debris.
Cheten Wangdi, a 69-year-old resident, owns a three-story building in Dechencholing. While there was minor structural damage, the primary loss was his water tank, which was completely destroyed. “I was unaware that flood insurance could cover such severe damage,” Wangdi says. He had only fire and property insurance, which does not cover flood-related damage unless specifically included in the policy.
Lama Phuntsho, a 39-year-old flood survivor who runs a scrap business, experienced partial submersion and damage to his two Mahindra Bolero vehicles. Despite being aware of comprehensive motor insurance policies that could aid in his recovery, Phuntsho remarks, “The safety of my family is what matters most. The support from our king and government has been invaluable. It’s enough to help us rebuild from what remains.”
Bhutan’s insurance sector comprises two companies: Royal Insurance Corporation of Bhutan (RICBL) and Bhutan Insurance Limited (BIL). Both offer policies designed to aid victims of unforeseen mishaps. However, navigating the claim process can be complex, requiring adherence to specific criteria related to the type of insurance and its coverage.
Insurance policies often come with specific criteria that can make it challenging for individuals to receive compensation, especially if they lack proper coverage or if their property does not meet the required conditions.
Insurance policies has some checklist while providing insurance, and when acquiring insurance becomes hard or when there is no insurance put by the insured individual, the situation is very critical as they have to rebuild everything without any financial support.
The Underwriting Manager at BIL explains, “3rd party insurance policies typically do not cover personal damage, as this falls outside the scope of such coverage. The extent of coverage depends on the type of insurance policy and the value of the insured property. Premium plans with higher premiums often offer more comprehensive coverage, including personal damage.”
Meanwhile, as Dechencholing residents embark on their long road to recovery, the need for better insurance policies, greater awareness, and a more accessible claims process becomes evident. This situation accentuates the importance of staying informed about insurance options and being prepared for unexpected events.
By Mashuri Rai, Thimphu
