And now, wedding insurance

Recently, I attended the wedding of a retired school teacher's daughter. He said he had spent Rs 5 lakh on the wedding. Fortunately, everything went off well but what if the wedding had to be stopped because of some natural calamity?

How would Mr Krishnan manage to re-arrange the wedding? From where would he raise the money? Tough ask till recently, it is now possible to insure a wedding. A few insurers including Bajaj Allianz and ICICI Lombard are offering to do so to cover the risk. Net-net, if the wedding gets cancelled following the named risks in the policy, the insurer will pay for the financial loss.

Coverage

Wedding insurance being an event insurance product, the policy's term starts a few days before the wedding and ends on the event's completion. The wedding insurance policy with Bajaj Allianz, for instance, starts seven days before the wedding event and ends on the midnight of the wedding day.

Wedding insurance policies cover cancellation of wedding for reasons such as burglary at the venue (of jewellery and cash kept in a safe), perils such as fire, earthquake that cause damage to property and life.

Accidental death or injury of the persons named under the policy are also covered. It also covers permanent partial/total disablement of the insured person(s).

In a case where a policyholder manages to re-arrange the wedding on the same day after the occurrence of an insured event, his claim for wedding cancellation will still be honoured.

However, he will be paid lower of the non-refundable expenses or the additional expenses incurred in conducting the wedding at a new venue, says the spokesperson of Bajaj Allianz. Damage to property or life of guests who attend the wedding can also be covered by paying for the public liability cover offered with the wedding policy. 

A wedding's cancellation due to dispute between the families is among the exclusions under the policy.

Nor can you expect the insurer to pay up for cancellation of wedding due to kidnapping of the bride/bridegroom, loss/damage to some property to be utilised for the wedding that is stored without any supervision in a location other than the venue of the wedding and death/injury to the insured person(s) under the influence of liquor or drugs.

Claim process

Wedding insurance policies work on the principle of indemnity. The insured will be paid the actual loss suffered subject to a maximum of the sum insured. When making a claim here, Mr Sanjay Datta, Head Underwriting and Claims, ICICI Lombard GIC says that the policyholder will have to submit all bills and vouchers for proof of expense (also a FIR copy in case of a burglary).

The claim process he explains, starts with the insured intimating them about the loss and them sending an independent surveyor to the loss site for survey.

And after this, as the insured submits the documents required by the surveyor, the surveyor sends the survey report to the insurance company and the claim is processed for settlement.

Securing the bills and vouchers may prove to be a constraint as a many of the payments one makes towards wedding expenses like renting of the hall, catering or decoration are often demanded in cash, with one seldom getting a bill. What is the sum under coverage?What is the amount of total wedding expenses one can insure? What if one plans a Rs 1 crore wedding in the Swiss Alps? To place a limit on such excesses, some insurers set limits for each item of expense incurred in a wedding.

While some insurers such as Bajaj Allianz have pre-determined sum insured under each section, others give a free hand to the customer to decide the sum insured they want.

But the premium will vary depending on the location where the wedding has been planned and the safety arrangements at the venue. Therefore, underwater weddings or those where the couple are sky-diving, may cost quite a bit to insure!

The deal

A wedding package policy with Bajaj Allianz that includes covers for wedding cancellation, property protection, personal accident, money and valuables for an amount of Rs 2 lakh each (totalling up to Rs 10 lakh) and a public liability cover (that insures your guests) up to Rs 10 lakh comes for Rs 2,850.

There are plans with higher sum insured of Rs 8-15 lakh too, under each head, with this insurer. With ICICI Lombard, a cover for wedding cancellation alone for sum insured of Rs 5,00,000, will cost about Rs 5,000. A public liability cover of Rs 10, 00,000 with the policy will cost an additional Rs 10,000.

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