Climate change: Why Indians should look at home insurance more seriously
A home is in all likelihood the most expensive asset purchase people make during their lifetime. However, when it comes to adequately protecting this asset, we tend to be targets of optimism bias. It is no surprise that home insurance penetration is just about 1% in India. This is in stark contrast to countries like US, UK, France, Australia and China that have home insurance penetration in the range of 90-97%.
If we look at the data on natural disasters in India, we would realize that the incidence of such calamities has risen significantly. Climate change and its impact on our lives is becoming a reality sooner than we had imagined and it is important to understand these risks in a more realistic manner.
While India is among the most disaster-prone countries in the world, the frequency and intensity of extreme natural calamities has gone up significantly.
According to a report by CSE and Down To Earth, climate change-induced natural disasters destroyed around 410,000 houses in 2022 alone. On an average, four cyclones affected India each year between 2010 and 2019 and the country has seen an alarming 32% increase in cyclones and severe cyclones between 2015 and 2019.
These calamities not only affect livelihood but also cause real damage to properties and livestock worth billions of dollars.
The problem of climate change and the natural disasters that it induces is not limited to coastal areas alone. Urban flooding in India has become a reality due to rapid urbanization, illegal encroachment and poor drainage systems with regular flooding events being witnessed in the last 20 years in major cities like Bengaluru, Delhi, Mumbai, Chennai, and Kolkata, among others. An optimism bias dissuades us from adequately protecting
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