October 28, 2021

What is the meaning of STFI?

What is the meaning of STFI?

STFI stands for Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation. It is a combination of events that most Fire Insurance policies in India provide financial protection from. These specific natural disasters are bundled together to form one peril because of their relatedness and co-occurrence.

Fire and allied perils insurance products like the Standard Fire and Special Perils (SFSP) policy, the Bharat Laghu Udyam Suraksha (BLUS) policy, and the Bharat Sookshma Udyam Suraksha (BSUS) policy all cover the insured against any loss, destruction or damage to their insured property directly caused by an STFI event.

Storm : Storms is a generic term that can refer to any phenomenon on land or on water. In Insurance, they refer to any kind of extreme weather that has the potential to damage the insured property. A storm implies severe atmospheric disturbance accompanied by strong winds, lightning, rains, and sometimes even hail or snow. They are a relatively common occurrence, and do not usually contribute to significant physical damage.

Cyclone : Cyclones have the capacity to wreak considerable havoc across cities, devastating not just homes but countless businesses and livelihoods as well. A cyclone is a violent storm with very high winds rotating around a calm centre of low pressure. They usually form over the South Pacific and Indian Ocean, and can cause destructive winds in excess of 280kmh, floods, storm surges and widespread damage. In India, the coastal states of Tamil Nadu, Andhra Pradesh, Orissa and West Bengal, Gujarat, etc. are prone to cyclone hazards.

Typhoon : Typhoons, tropical cyclones and hurricanes are similar phenomena. They are merely known by different names, but are defined similarly as tropical storms with wind speeds exceeding 119km/h. Typhoons are nothing but mature cyclones and they frequent the same locations.

Tempest : A tempest is a violent windy storm, especially one with rain, hail or snow.  A fairly outdated term, it is included in the list of insured perils to expand the degree of cover and make the nature of the insured events clear to the policyholder.

Hurricane : A hurricane is nothing but a tropical cyclone in the Caribbean region, specifically, the countries in North and South America and some parts of Japan, China and Vietnam. Defined as storms with violent winds with a low pressure centre formed over warm waters, hurricanes, tropical cyclones and typhoons and interchangeable terms and only vary depending on where they occur.

Tornado : A tornado can be defined as violently rotating winds forming a vortex on land. This disaster differs from a cyclone, typhoon or hurricane based on where it occurs. Tornadoes occur on land while tropical cyclones occur on water bodies. Many parts of Australia, India, Spain, Brazil and other countries are prone to tornadoes. In India, the Bengal region is especially prone to it.

Flood : Floods may be a result of heavy rains, cyclones, typhoons or heavy storms. In India, the states of Maharashtra, Gujarat, Haryana, Punjab, Uttar Pradesh, among others. Policies with STFI cover any damage arising from floods or flood tides.

Inundation : Inundation is usually referred to in combination with flood. It implies the overflowing of water resulting in a dry area becoming drowned or submerged. Inundation can refer to both the actual act of flooding and the result of such flooding.

  • You must immediately inform your insurer of the damage and call an appropriate authority to contain the situation. The insurance company can reject your claim if it feels that you did not prevent further damage from occurring to the insured property
  • All the necessary documents such as the duly filled claim form, copy of claim intimation, the policy and the premium receipts need to be furnished
  • You must also provide the insurer or their surveyor/investigator with registers, original invoices, bills, and books of accounts to help substantiate the amount of loss/damage, the value of damaged property prior to the loss, and the value of property that can be salvaged
  • The insurance company may send their experts to assess the situation in case the cause of damage cannot be easily determined
  • Save newspaper clippings where the event of loss (flood, cyclone, storm, tornado, etc.) is reported. It is advisable to take photographs, if possible, to help your claim
  • The insurance company will survey the meteorological report at the time of the loss/damage to confirm the occurrence of an STFI event

In Standard Fire and Special Perils (SFSP) Insurance, you can choose to delete coverage for STFI perils at the inception of the policy if you’re convinced of the unlikelihood of such events. A reduction in the premium rate is allowed for such a change. However, it is always recommended to have this coverage.

Consequently, cover for STFI risks can be added during the policy period in special circumstances.

Fire Insurance also covers loss or damage caused by FLEXA risks. Read more about them here

Opinions, conclusions and statements of intent expressed in this article are that of the author and Verak does not accept liability for the views expressed unless confirmed by an authorized representative of the Company independently of this communication.