Wedding Insurance: A way of recouping losses caused by contingencies
Attending events like cricket or football matches, music festivals, exhibitions and even glitzy weddings are welcome propositions. One gets to see so many new and interesting things there. These are events organised on an impressive scale at considerable expense. But were you aware that they are all usually insured against the risk of cancellation?
If we look closer home, the one happy event the world over that everybody looks forward to, is a wedding. Weddings involve a lot of organization, planning and of course expenditure. Not to speak of big budget glitzy weddings it would not be incorrect to state that the average middle-class wedding in India costs upwards of at least Rs 20 lakhs, these days. The 'big, fat Indian wedding' is a common phenomenon for us.
The rich go in for big budget destination weddings and one only has to think back to the lavish Isha Ambani and Anand Piramal wedding which was estimated to cost anything upwards of $15 million. As one would imagine, such a big budget wedding with an elite guest list would result in big losses in case of an unexpected cancellation. But that would be the case in any wedding, whatever the budget may be.
Estimates peg the annual rate of growth of turnover in the Indian wedding industry at about 25 per cent per year, prior to the pandemic. People are not averse to spending a large proportion of their accumulated wealth on this once-in-a-lifetime event. But things can go wrong and jeopardise this memorable event. All your planning and expenses could go up in smoke in case of an unexpected and unwelcome contingency such as a fire at the wedding venue. Or the father of the bride may suffer a sudden accident the day before the wedding and have to be hospitalised throwing the wedding plans and the family into disarray. A last-minute cancellation of the wedding could thus lead to large losses considering the no-refund policy followed by venue providers and caterers etc.
Th wedding season is approaching and even though the COVID-19 pandemic and the corresponding governmental restrictions have curbed the wedding celebrations to a large extent the expenses of the weddings taking place now are still quite high. Wedding insurance is therefore as relevant, as it was earlier. This would bring us to Wedding Insurance as a way of recouping losses caused by such contingencies. Running through the following Frequently Asked Questions would dispel the queries which would normally come to one's mind:
What is wedding insurance?
It basically provides coverage against the financial losses caused due to the unexpected postponement or cancellation of a wedding due to either natural calamities, fire, theft or burglary at the marriage venue. Customised plans can also be bought for risks associated with the venue.
Accidents or death are also covered to the extent that they cause a sudden failure of the specified persons to arrive at the marriage venue.
What are the other situations covered?
Losses from unforeseen injuries or death of a family member can also be covered under the Personal Accident Section. Other possible contingencies such as damages to third-party property and lives of guests at the venue can be covered under the Public Liability Section. Burglary of jewellery or cash from home can also be covered.
What is the duration of wedding insurance?
The duration of the cover can be upto a maximum period of seven days. It usually starts 24 hours prior to the wedding related ceremonies, regardless of when the cover was purchased and it ends on the midnight of the day after the wedding. Whilst standard plans are available, one may also opt for customised plans.
What are the financial losses covered in wedding insurance?
It covers the financial loss caused due to expenses already made and incurred due to the music and decoration costs, catering, printing of invitation cards etc. Losses incurred due to the non-refundable expenses already made by way of advances for the marriage venue, travel agencies, hotel room booking would also covered. However, in case of claims the relevant documentary evidence would also have to be submitted and hence they should be kept available.
What are the exclusions?
As you would be aware, it is as important to know what is not covered as much as one should be aware of what is covered. If you have watched the 1999 English movie, "Runaway Bride" you would know that many brides and even grooms develop cold feet just before the marriage and may refuse to go ahead and tie the knot. Such a situation is not covered by insurers.
As the covid-19 pandemic is a known fact now, it will not be covered either. An unexplained disappearance of property to be used for the insured event and detected at the time of taking inventory will also not be covered. Other important exclusions include terrorist attack, bandh and/civil unrest, kidnap of either the bride or groom and breakdown of the vehicle bringing the bride or groom to the marriage venue.
How much does wedding insurance cost?
You would be glad to know that it is not costly. The premium is likely to range between 0.7 per cent to 2 per cent of the insured amount or sum insured, in insurance parlance. This is available from most general insurers and can even be customised to requirement.
How common is this insurance?
It is gaining traction as people are learning about its benefits. High budget weddings are more commonly insured than others due to the inputs provided by well-informed wedding planners.
What are the requirements for claims?
Some important points relevant for claims are:
A clear break-up of all expenses backed up by suitable documentation will be required by the insurers. The maximum amount that can be claimed is the Sum Insured, on which the premium has been paid.
Hence, if expenses exceed the Sum Insured these expenses cannot be claimed. The claim is paid on the basis of actual losses supported by documentary evidence.
The writer is former Manager, National Insurance Company Ltd.
