Kerala approves group insurance scheme for houses hit by natural disasters

Thiruvananthapuram, Feb 24 (PTI) The Kerala government on Tuesday approved a comprehensive group insurance scheme to provide financial protection to houses damaged by natural disasters.

The decision was taken at a Cabinet meeting chaired by Chief Minister Pinarayi Vijayan, as the state seeks long-term solutions to cope with the growing impact of floods, landslides, and extreme weather events.

According to a CMO release, the scheme will be implemented through the State Insurance Department and is designed to reduce the financial burden on the government arising from repeated disaster-related rescue, relief, rehabilitation, and reconstruction works.

Officials said frequent natural disasters have forced the state to spend large amounts every year, affecting its overall financial stability.

To address this, the government had earlier appointed a committee led by Planning Board member Ravi Raman to study a suitable risk transfer mechanism for Kerala.

Based on the committee's recommendations and further studies conducted by the Rebuild Kerala Initiative, the Cabinet gave in-principle approval to a comprehensive group insurance model combining parametric and indemnity insurance.

Under the parametric insurance component, the state will receive immediate compensation if disaster indicators such as rainfall, flooding, or wind speed exceed predefined limits in a particular area.

Individual damage assessments of houses will not be required, allowing the government to quickly deploy funds for relief and rehabilitation according to standard procedures.

The insurance cover will be based on the average amount spent by the state on disaster relief over the past decade, with the policy proposed for a five-year period.

The indemnity insurance component will provide direct compensation to house owners from below-poverty-line (BPL) families in affected areas.

The coverage will include damage to houses, household goods, and rental assistance until repairs are completed.

Insurance cover per house will be up to Rs 10 lakh, with compensation paid directly to beneficiaries after verification.

The total annual cost of the scheme is estimated at around Rs 120.75 crore. PTI TGB SSK