Compensation for flood damage: NITF pays Rs 125M | Sunday Observer

Compensation for flood damage: NITF pays Rs 125M

The National Insurance Trust Fund (NITF) is playing a key role in dispersing funds to settle the claims made by the people whose properties and businesses were damaged in the recent floods.

The Fund has already released Rs. 125 million to meet claims, NITF Chief said. There are many claims for damaged properties and loss of life which will be compensated by the government as well as the insurance companies.

“The government has paid the premium to the NITF for cover under the national natural disaster scheme. We will pay for all the damages suffered to houses up to maximum of Rs 2.5 million. The actual damage will be assessed and paid accordingly. In the event of a death, a compensation of Rs 100,000 will be paid,” NITF Chairman Manjula de Silva said.

Apart from houses, small business where the annual turnover was less than 10 million are entitled for damages. They will be paid a maximum of Rs 2.5 million.

The claims have to be made through Grama Sevakas and the Divisional administrative structure. The assessment of damage to houses and businesses should be done by the District Secretariat and sent to the Ministry of Disaster Management, he said.

“We provide the funding only. We do not get involved in the assessment process. As the settlement work takes some time, some funding as emergency relief has been made available. Under this, the Ministry of Disaster Management has been given Rs 125 million for immediate pay out. We provide all these funding with the government’s premium and the internally built funds,” he said.

The floods and landslides that occurred in eight districts due to heavy rains have had an effect on the insurance industry. Insurance Association President Deepthi Lokuarachchi said that their members are severely affected due to the natural disaster.

“Our members have been severely affected, specially those in Ratnapura and the Southern Province. There are quite a number of claims that have come in at present. The assessment of these claims is on going,” he said.

The individual member corporations handle the claims according to their own policies. However, the claims are unusually high. The claims will be settled depending on the each company’s loss adjustments and mobilization. The biggest challenge is the finding of loss adjustors, he stressed.

“We have deployed the full force to cope up with the situation and we will meet the claims in minimum possible days,” he said.

The Sunday Observer spoke to leading insurance companies to ascertain how claim requests are being made and how many have been settled.

“We have immediately responded to the claims made by our customers. There are over 1,900 claims made so far and we have inspected 90 percent of the claims made. The company has settled over 350 claims already and our policy is that any size of a claim is settled within 14 days. We will do it this year too,” the Chief Executive Officer of Ceylinco General Insurance, Ajith Gunawardena said.

“The remaining10 percent of the claims were not inspected as we could not reach the said areas due to the high water levels,” he said. “We expect the claims to be around Rs 2.1 billon and we are adequately re-insured, he stressed. The claims are made for motor vehicles and properties such as houses, shops, factories, roads and bridges. The non-motor claims stands at 70 percent while motor claims are 30 percent of the total claimed.

“We expect to inspect the few cases that had not been inspected as yet as soon as the water levels recede and all the claims will be settled within the next few days. All our staff is mobilized to resolve the claims day and night meeting necessary details and activities from our part,” he said.

Sri Lanka Insurance Company said that they have received over 900 claims for settlement.

“We have received 450 property claims and 450 motor claims so far. There may be few more claims to come. Though, we cannot value the exact amount of the damaged claim, we expect it to be in the range of Rs 300 million,” Sri Lanka Insurance – General Insurance Deputy General Manager Thanuja Hingulage said.

“We have already mobilized our staff to the relevant areas to inspect and assess the damage. As the full payment will take longer in time, we are in the process of releasing an advance to the claimants. Once the documents for the claims are forwarded and the bills are presented we will assess and make the payment in full after deducting the advanced paid,” she said.

Meanwhile, the government has decided to increase the reinsurance cover for natural disasters to Rs 15 billion this year.

The cabinet granted approval last week to increase the sum allocated to insure all citizens for loss of life and property during times of natural disasters such as tsunami, floods, landslides and incidents of lightning.

This is an increase of Rs 5 billion from last year’s cover where the Rs 10 billion insurance cover was split in to 8.5 billion for property damage and Rs 1.5 billion for compensation to victims.

This year Rs 12.5 billion will be allocated to property damage and the rest to cover loss of lives.

Under this scheme, in the event of a natural disaster, Rs 100,000 will be paid in insurance claims in the event of a death while a maximum of Rs 2.5 million is paid for property damage.

Sri Lanka is the only country to provide free disaster insurance cover to all people. In 2016, the same scheme provided Rs. 2.95 billion to pay 53,000 claims and in the next 2-3 weeks and a further Rs. 1 billion will be paid to around 7,000 late claims from the 2016 floods. In 2015, the government took a national insurance cover for all citizens from the National Insurance Trust Fund (NITF) to help them during times of natural disasters. As a results, Cabinet this year already approved Rs. 500 million as premium payments to the NITF.