Wedding insurance too

India witnesses nearly one crore weddings annually, and the craze for the big fat ceremony makes it a booming industry. Since there is a significant financial investment involved, ensuring protection against unforeseen events becomes crucial. This is where wedding insurance comes into play.

Wedding insurance is designed to cover the risks associated with the elaborate ceremonies, providing peace of mind to the couple and their families. It’s a niche segment, but wedding insurance is gaining traction rapidly. The low adoption rate can be attributed to a lack of awareness and the general complexity of the wording of the policy and buying process.

At present, 10-12 insurance companies offer wedding insurance either as a product or for event insurance/event cancellation. The major insurance companies that are offering wedding insurance include IFFCO Tokio General Insurance Company, Bajaj Allianz, HDFC Ergo, Future Generali, ICICI Lombard and Oriental Insurance.

Global research firm Jefferies estimates that Indians’ average expenditure per wedding stands at over three times the average annual household income.

According to Jefferies, Indian weddings attract an average expenditure of about ~12 lakh, which is three times the country’s average annual household income of around ~4 lakh and five times India’s per capita gross domestic product of around ~2.4 lakh. But, in real terms, weddings can cost considerably more.

The actual expenditure starts from a few lakhs and can run into crores. Destination weddings can cost even more, with a Goa wedding pegged at ~1 crore to ~5 crore, and a Jaipur wedding costing around ~1.5 crore to ~2 crore.

According to Jefferies, despite being an otherwise price-conscious society, Indians disproportionately spend on weddings compared to their income or wealth. The Indian wedding industry, valued at a whopping ~10.9 lakh crore, sees twice as much spending on weddings as compared to education.

Given the high costs associated with weddings, insurance provides a safety net against significant financial losses. It’s important to have a cover that shields from monetary losses in case of a disruption leading to cancellation or postponement of the event. Also, natural and manmade risks have the potential to inflict damage to personal or public property.

Insurance protects the policyholder from monetary losses and also covers major risks that have the potential to disrupt the wedding event.

At present, wedding insurance is a relatively untapped market and popular mainly for weddings that cost in excess of ~50 lakh. It covers the policyholder against uncertainties beyond his or her control.

The insurance product covers the financial loss sustained by families or wedding planners owing to cancellation or postponement of the wedding or related events. The policy can trigger in case of a fire, flooding, earthquake, storm and can even extend to death or illness of the bride, groom, or parents. It’s a flexible product and the premium depends on the coverage and the sum insured.

“Wedding insurance is important especially in India because of factors like large gatherings, high budgets, multiple events and the customs. The financial loss of cancellation or postponement of one or more events can therefore be drastic for families or the wedding vendors involved,” says Niharika Singh, ED, Marketing, IFFCO Tokio General Insurance Company Limited. Since insurance awareness is a prime factor, the policy is largely bought in Tier-I cities like Mumbai, Delhi or Chennai currently.

Event insurance

The insurance companies offer wedding insurance as a product or for event insurance/cancellation. Event cancellation insurance provides tailored coverage for unforeseen disruptions that can prevent an event from taking place. The policy protects against risks such as fire, lightning, storm, typhoon, flood, earthquake and terrorism at the premises booked for the event. For example, IFFCO Tokio, additionally, covers cancellations due to mourning declared following the death of a dignitary where the event is scheduled, as well as the sudden accidental death of the bride, groom, or their parents in the case of weddings.

Since wedding is an auspicious occasion, people in India don’t entertain any negative thoughts that things can go wrong on one of the most important days of their lives. So, it’s not much popular as compared to other policies. “Considering the increase in high-budget weddings and participation of organised hospitality players, this niche insurance has a very high scope,” says Niharika Singh.

Coverage Offered

• Financial losses if the wedding is cancelled or postponed due to unforeseen circumstances.
• Provides protection against loss due to damage to the wedding venue, fire or

  other incidents.

• Covers losses if a vendor (caterer, florist, photographer) fails to deliver services.
• Offers compensation for accidents or injuries to the bride, groom or immediate family members.
• Covers loss or damage to wedding attire, jewellery, gifts and other valuables.
• Some policies offer coverage for additional risks such as theft of wedding gifts and more.

How to Choose policy

• Assess coverage which is essential for the wedding.
• Understand what is not covered by the policy to avoid surprises later.
• Compare premiums from different insurers to find the best deal.
• Choose an insurer with a good track record of handling claims efficiently.