Safeguard your home against damage

A householders’ insurance policy will protect both the building and its contents

Householders’ insurance policy can give you peace of mind against many risks.

My house is in a location where there is no risk of flood or earthquake. Should I take home insurance?

Yes, you should. There are many risks and problems that are covered in a home insurance, not just flood and earthquake. For example, damage from fire may be something you may want to insure for. Likewise, theft, lightning damage and landslide are other risks that a home insurance can cover.

You can also protect against damage from impact or other falling objects by choosing impact and aircraft damage covers. Events such as riots and strikes as well as terrorism can also be covered.

Your house can be covered for a premium of ₹1,500-2,000 per annum, depending on the location of the property and the type of construction, by the home package policies or standalone cover policies available with all general insurers in the market. Land price is typically excluded.

If I insure my house, will all furniture and fixtures such as fan/lighting be automatically covered?

No. A home insurance policy consists of multiple parts; you can pick and choose what you want to cover and for what amount. For instance, if you choose to cover only the house and nothing else, and if your wood work is damaged, it will not be covered by the insurance.

Instead of a standard fire policy, you may want to take householders’ policy that has many add-on covers to choose from. For example, you can include appliances such as TV, and other valuables such as jewellery. The cost for an all-risk cover in a householders’ package policy is ₹800 for every lakh of cover. The advantage is that the declared jewels are covered for chain snatching and theft.

What is the value for which the individual items must be insured for?

It is prudent to insure the items on their replacement value, rather than go by the depreciated current value or second-hand price. For example, if your refrigerator is five years old and its value is only half of what it was when you bought it, insure it for a value which is equal to the current purchase price of a new fridge. This will not add much to your premium, but will help you buy a new one, should there be any damage. For instance, a total appliance coverage of up to ₹14 lakh costs ₹7,120 per year, with the home insurance plans available in the market.

I own a flat. Should I insure just what I own or even the shared areas and car park?

It is advisable to insure your car park to cover any damage to the items kept in that area. For shared areas, you must check if your housing society has taken an insurance. It does not hurt to include it in your policy as well. In case of an individual house, cover your compound wall, specifically. Home insurance plans allow inclusion of compound wall and landscaping.

If the house does not have any commercial operation, should I worry about liability cover?

Yes. Suppose a person who climbs a tree to trim the branches or pluck coconuts falls and gets injured. Having a public liability cover will help you in case of such mishaps. It is available as an add-on; the cost is ₹40 to cover ₹1 lakh of public liability, in a package policy. Likewise, any injury to maids or other workers in your premises can be covered with employee compensation; cost is ₹10-25 per person.

I plan to rent out my semi-furnished flat. What should I insure?

You must insure the flat as well as furniture and fixtures such as modular kitchen or other wood work and electrical fittings that you have added.

The items not owned by you cannot be insured as there is no insurable interest. The occupant can opt for a tenants’ insurance policy. In case there is burglary in the absence of the tenant, any damage to the house due to a break-in will be covered, but not the value of the goods stolen.

What precautions should I take to ensure that my claim is not denied?

When insuring, you must include all the items that you want covered.

It helps to file your claims early without delay and make sure you fill in all the required fields accurately. Some claims such as theft require filing a police complaint, while many others do not.

Be sure to read the terms of the policy and know the right procedure. For example, if the house is left unoccupied for an extended period and you have not informed the insurance company, your claim may be denied.

The writer is co-founder,

RaNa Investment Advisors.

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