An increasing number of contractors managing parking lots at malls, multiplexes and five-star hotels are buying parking insurance covers. Insurance for parking lots is a novel concept in India and is likely to gain ground with parking getting more organised.
Brokers, who customise covers for contractors, said the retail boom had led to a demand for such covers over the last one year.
For instance, Hyatt Hotel in Delhi has outsourced parking management to Jupiter Security Services, which in turn has bought a cover from National Insurance Company.
In cities, large hotels and multiplexes outsource car parking management to contractors. Several foreign contractors such as Intertoll of South Africa, Tenaka of Malyasia, Tramell Crow and Knight Frank have entered India.
These contractors specialising in managing buildings, multiplexes, roads, and parkings lots have made standalone parking insurance popular. Third-party liability insurance so far would take care of any liabilities arising from damage to cars parked in the premises of malls and multiplexes.
Rahul Aggarwal, director & CEO, Optima Risk Management Services, said "Five-star hotels have premium cars parked in their parking lots. If a car is stolen, the contractor and the hotel owner are held liable for the theft. Similarly, if a car is damaged while parking, the contractor or the hotel owner are held liable for the damages. Visitors in large hotels are VIPs and are legally aware. Therefore, hotel owners, mall owners, multiplex owners ask contractors to buy parking insurance when they outsource the job."
Parking insurance is a variation of a liability insurance policy. It covers the life of car owner whose car is parked inside the parking lot, any injury to the owner, damage to the patron's vehicle, damage to a standing vehicle due to some other vehicle being parked, theft of a vehicle or its contents, death or injury to a patron while in the parking lot due to fire, explosion or collapse, etc.
The insurance also covers loss of income to the parking lot manager in case the lot is closed due to fire, explosion, collapse, flooding or digging/excavation work by municipal authorities, electricity supply companies, telephone companies, etc.
The primary insured is the contractor while the hotel/multiplex owner is the co-insured. For a five star hotel, the sum insured for a parking insurance cover ranges from Rs 4 to 5 crore (Rs 40-50 million). The premium ranges from 0.6 to 0.7 per cent of the sum insured. For a Rs 4 crore policy, the premium would be about Rs 250,000.On the other hand, in a multiplex, the composition of the cars is diverse ranging from a Maruti 800 to a Mercedes so the risk is diversified and the sum insured is normally Rs 1-2 crore (Rs 10-20 million). At present, the four government-owned general insurance companies offer this cover.