Mandatory home insurance planned; costs to rise 2-5%

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Published on July 14 2007,Page 1

Mandatory home insurance planned; costs to rise 2-5%

Measure will ensure compliance with earthquake and fire norms
Varun Soni New Delhi, Jul 13 The government is planning to make home insurance mandatory for developers to ensure that buildings are structurally sound enough to withstand earthquakes and fire. According to government sources, a clause to this effect will be included intherealestatemanagementBillto be discussed by the Cabinet shortly. Once home insurance becomes mandatory for developers, insurance companies will be able to exert checks and balances on realty developers and view a building design critically.Infact,thepremiumwillbe lower if the building adheres to better earthquake resistant technologiesandviceversa. Themovewillsavecustomersthe trouble of getting their homes individuallyinsured,asthatwillbetaken care of by the builder. Though this does mean that the builder will pass on the cost of home insurance to the customer, thereby increasing the costofanapartmentby2-5%. "This is a small cost for safety," saysSandeepDonaldShah,director, Taylor Devices (India), a multinational that deals in earthquake proof technology. "This will result in a better product for the end-user. In fact, developers following the Indianseismiccodewilldesigntheirprojects so as to adhere to the collapse preventionlevel." Experts feel the step shows the government's seriousness in ensuring earthquake safety and that builders construct earthquake resilient structures. Even urban developmentsecretaryMRamachandran reportedly visited Japan recently to seehowearthquakeprotectiontechnology has been put to use in that earthquake-pronecountry. Another important initiative is that financial institutions will now consider the compliance with seismic safety standards before offering housing loans, including those for construction of multi-storeyed complexes. In fact, the housing development programmes supported by the Centre and state governments, as well as all large-scale housing schemes, will be made to comply with earthquake-resistant design andconstructionpractices. The design of all structures will nowhavetogothroughamandatory compliancereviewbyapanelofprofessionals. Self-certification for all structures will be an integral part of the approval process for building plans under which all professionals involved in different aspects of building safety certify compliance.

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