Rural Insurance: Coverage, Claim & Exclusions

The fact that 70% of the population in India lives in rural areas and contribute to the development of the country in a big way makes it important for them to avail schemes meant for their welfare. It wouldn’t be wrong to say that farmers and their agriculture business play an important part in the growth of our country. Thus, it makes sense for this section to get coverage as per their needs in the form of rural insurance plans.

What Is Rural Insurance?

Rural insurance ensures that families living in rural areas have a safe and secure future so that they can lead a happy life. The insurance helps them to cover risks related to various aspects of their life. Rural Insurance policies come with the affordable premium rates and faster claim process.

Types Of Rural Insurance

Rural insurance includes a wide range of plans to cover various sections. Some of them are:

What Rural Insurance Covers?

Rural insurance is associated with the lifestyle risks of people residing in villages. This insurance policy includes:

• Hut insurance
• Poultry insurance
• Cycle rickshaw policy
• Sericulture insurance
• Honey bee insurance
• Failed- well insurance
• Sheep and goat insurance
• Lift irrigation insurance
• Farmers’ package insurance
• Agricultural pump-set policy
• Animal-driven cart insurance
• Gramin personal accident insurance
• Aqua-culture (prawn/ shrimp) insurance
• Horticulture/ plantation insurance scheme
• Animals included in rural insurance are elephants, rabbits, pigs, birds, zoo and circus animals.

How Rural Insurance Functions?

In order to get the best deal, it is important to understand rural insurance well and also, know how it functions:

• Analyse your requirement and the loss associated with your assets so that you know which type of insurance to opt for
• The analysis will also help in deciding the premium amount
• Check and compare various insurance companies and plans to pick up the best one for you
• The insurer checks whether the applicant resides in the rural area
• The premium is mutually agreed between the insurer and the insured after going through the property/ livestock details
• When a risk occurs, the insured immediately informs the bank/insurer company about the mishap
• Evidence of the event, duly filled claim form and FIR Report (if needed) are submitted by the insured
• The claim is verified by bank officials. If authentic, the claim is settled, else it is rejected

Eligibility Criteria

According to the Insurance Regulatory and Development Authority of India (IRDA), rural sector which is eligible for this insurance has to fulfil the following categories:

• Has a population less than 5,000 people
• Density of population is not more than 400 per square kilometre
• Minimum 75% of male population must be engaged in farming activities

Claim Process

In case of some eventuality, you can make claims by following a set procedure. It is important to be aware of the steps in order to avoid any rejection:

• After the eventuality, inform the insurance company as soon as possible
• Provide the duly filled in claim form along with the required documents
• Submit the proofs and certificates
• After an assessment, if the provider finds it fit, your claim will be accepted and you will receive your compensation, else it will be rejected
• If you are not satisfied with the decision, you can approach the court of law

Some of the documents required to be submitted to the insurance company for making claims are:

• Duly filled in claim form
• Photocopy of insurance policy
• FIR report in case of accidents/ vandalism
• Death certificate (in case of death of the insured)
• Evidence of equipment damage (in case of property insurance)
• Ear tags (in case of cattle insurance)
• Demand draft/cancelled cheque of the bank account where the claim amount has to be paid

Time Taken to Settle Claims

Rural insurance claim is processed and settled within 30 days of submitting the supporting documents. If further investigation is needed, the insurance company can take maximum of 3 months.

Exclusions

Though rural insurance has different sets of exclusions, which are:

Moreover, the claim is not payable if the claim amount does not exceed 10% of the total insured sum per acre/ Rs 1000 per affected acre, whichever is lower.

Companies Offering Rural Insurance in India

Rural insurance is a specially designed insurance, keeping in mind various sections of rural India. Some of the companies providing rural insurance in India are:

• TATA AIG
• Aviva India
• Cholamandalam
• Oriental Insurance
• IFFCO Tokio

Advantages of Buying Rural Insurance

It is important to spread awareness about various types of rural insurance so that people residing in rural areas get to benefit from schemes meant for them. Some of the benefits of purchasing rural  insurance are:

• Easy to  understand plans
• People have to pay low premium which can be affordable
• The plan can compensate for monetary losses covered under the plan
• The plan can help people in rural areas become independent