8 years ago

Earthquake insurance

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On April 25, 2015, an earthquake of 7.8 on Richter scale had caused havoc through Nepal. Death toll exceeded 8000 and hundreds of thousands of buildings were destroyed. Experts claim that the total loss from the catastrophe could be up to US$10 billion, more than half the total GDP of the Himalayan kingdom [www.livemint.com].
The insured cost of this quake, however, is said to be a small fraction of the actual loss, due mainly to the poor property insurance penetration (0.5 per cent) in Nepal, according to Axco Insurance Information Services in London.
Recently Myanmar, Japan and Ecuador were rocked by powerful earthquakes and the frequency of such incidents has made the experts all over the world worried.  
Due to its close proximity with Nepal, Bangladesh is equally vulnerable to large scale earthquakes. Moreover, the world's largest river delta close to sea level, Bangladesh is at the risk of earthquakes and secondary risks of tsunamis and flooding. In addition, the indiscriminate and unplanned urbanization in major cities like Dhaka, Chittagong, Khulna etc. has made the country highly vulnerable to natural disasters.
In recent times, the average Bangladeshis invest their lifetime savings in houses and apartments with latest amenities to ensure a comfortable living for them. Unfortunately, most of the house/apartment owners continue to ignore the importance of property insurance and also to secure their tangible assets against natural calamities and disasters. The negligence of the concerned stakeholders in alerting the public about the prudence of acquiring property insurance is responsible for the current state of affairs.
There are some Insurance Companies who have introduced an array of custom-made insurance products to recover the financial losses from natural calamities. The house owners now can get the fire insurance, earthquake insurance, burglary insurance, all risks insurance and other relevant products.
Through these insurances the policy holders can recover financial losses incurred by a natural calamity. Although loss of human life can never be compensated, the financial blows from unexpected tragedies can easily be overcome through timely insurance. Through property insurance people can restart their life after unfortunate happenings.  
In recent times, Bangladesh is experiencing frequent mild earthquakes which may turn disastrous anytime and cause destruction, although it is comforting to know that according to experts this is very unlikely. People are more cautious about natural calamities now. But very few are aware of the fact that the risk can be minimized to a great deal simply by availing proper insurance.   
The government should take the initiative and insurance companies should evolve attractive products to draw the attention of the people.

Kazi Tanvir Hussain
[email protected]
[email protected]

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