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Say ‘I DO’ to Insurance?

Written by: Dharini Shah

Team: Atharva Padwal (Research),       Saloni Bera (Research) ,     Aryan Tripathi (Editor)

“Matches can be made in heaven but the celebration of those can literally empty out your pockets.”

The holy ritual of weddings is an integral part of human civilization. But the system has changed drastically in consonance with the demographical, political and economic volatilities. However, the scales have been tipped towards it being pompous and grand. According to a report by KPMG, a multinational professional services network, and one of the Big Four accounting organizations, the Indian wedding industry, in 2017, was estimated to be around $40-50 billion in size. The cost of Indian Wedding could range between INR 5 Lakhs to INR 5 crores. With the addition of new customs and the trend of photoshoots (average cost ranging from INR 15000-100,000 per day), destination weddings (estimated to cross INR 45000 in 2020), and live coverage has only dug the pockets deeper. It has been said that an Indian, is likely to spend one fifth of his total lifetime wealth on a wedding. And with the looming possibility of wedding taking a wrong turn, and bearing a large monetary loss, it has turned this affair into a risky investment with a tub full of fears and uncertainty.

And hence to hedge the risk, many companies have come up with ‘wedding insurance’. Wedding insurance originated in England in the late 1980s and spread to the United States in the early 1990s. Diving into the history of its existence, it is known that the patent was filed on August 17, 2007 by Jason Schwalbe and Jeremy Schwalbe in New York. A method and system of insuring a wedding and determining a premium was disclosed. The policies available aren’t always a cookie cutter one, you can customize it, ask for riders and add ons and pay premium only for your insured elements. To take an example, there were special riders for military couples, extra coverage for honeymoon, or for your vendor cancellation. It’s not uncommon to hear that the wedding insurance is treated as an add on with event insurance covering personal accident, postponement or cancellation and damage to property.

Insurance Covers

The premium rate broadly varies from 0.75-1.5% of the total cover depending on the various risk parameters such as safety and security arrangements at the venue, geographical area, risk management or contingency plan. Some companies offer a fixed plan while others customize it to your needs. For instance, Bajaj Allianz offers four fixed options—covers worth Rs 20 lakh, Rs 35 lakh, Rs 58 lakh and Rs 73 lakh, which amount to annual premiums of Rs 2,252, Rs 4,004, Rs 6,232 and Rs 8,273, respectively (including service tax). The premium for a cover worth Rs 10 lakh would range between Rs 7,500 and Rs 15,000,” says Rajiv Kumaraswami, head, risk and reinsurance, ICICI Lombard General Insurance.

The coverage determination depends on amount and time of coverage as well as trigger for payout of insurance and payment schedule. In general, insurance covers liability coverage (third party damage during event due to accidents or injury), Cancellation coverage (losses due to sudden or unexplained cancellation of wedding), Damage to property, Personal Accident (hospitalization expenses of bride/groom due to accidents). But there are some events like cancellations due to expected seasonal rains & storms, disputes between bride, groom, family or friends, Loss or theft from unattended venues or vehicles or suicide, attempted suicide or self-inflicted injury or illness, terrorist attacks or civil unrest, which insurance policies refuse to cover.

When making a claim, 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 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.

“Wedding in India is considered to be an auspicious occasion and people would not like to even remotely associate it with misfortune” said Mr. Narayan of Future Generali India. An occasion of a marriage takes weeks and months of preparation and it is one of the most memorable milestones in life. With hundreds of chances of it going wrong, shouldn’t we play it safe than be sorry? There are so many instances of things going wrong in reality like groom experienced chest pains and went to hospital and newly diagnosed heart condition forced him to postpone wedding or bride’s father had bicycle accident and broke his pelvis; ceremony postponed or guest spilled red wine on the bride’s wedding dress and stains could not be removed; a skirt had to be replaced and a dress cleaned and preserved and hence wedding had to be compromised. And with premium only 0.7 % to 2% of the insured amount, I am of the opinion that it is in our best interests to let insurance companies back us up for any misfortune while we could just sit back and enjoy the union of two souls.