Protecting Your Home: The Importance of Home Insurance
Recent seismic events in Delhi and Kolkata, coupled with the ongoing threats of flooding in cities like Mumbai, Bengaluru, and Chennai, highlight a crucial need: home insurance. This insurance offers vital financial protection against the unpredictable nature of disasters and the property damage they can inflict.
“Home insurance is a comprehensive policy that covers fire and allied perils, including floods and earthquakes, for both home structures and contents,” explains Amrish Dubey, SVP, Personal Lines, TATA AIG General Insurance.
Beyond Natural Disasters: Coverage for Construction Damage
Man-made damages are also covered by home insurance. For instance, in Bengaluru, residents have reported structural cracks in their homes due to nearby metro rail construction. Home insurance often provides coverage in such scenarios. Ashwini Dubey, Business Head of Home Insurance at policybazaar.com, states, “If a customer’s property is legally compliant and documents are in order, damage to the home’s structure from nearby metro construction will be covered under a comprehensive home insurance policy. The policyholder’s policy should specifically include coverage for construction-related risks.”
It’s essential that the insurance policy is active before any damage arises, as most policies don’t offer retroactive coverage. “Therefore, the homeowner must have an active policy prior to the onset of construction, with no pre-existing damage at the time the coverage was purchased,” adds Dubey.
Understanding Home Insurance Claims and Settlements
The settlement of a home insurance claim hinges on the type of policy chosen. Some products offer claim settlements on a reinstatement basis. This means the insurer reimburses the actual cost of repairs or rebuilding, rather than simply paying out the total sum insured. Claims can also be settled on an agreed value basis, up to a specified sum. According to Dubey from Tata AIG, “The reinstatement option is available for both flats as well as individual houses, whereas the agreed value option is available only for flats. The agreed-value basis claim settlement is done as per the sum insured opted, but the reinstatement option covers the cost of reinstating the building structure.”
Individual Coverage vs. Housing Society Coverage
Living in an apartment within a housing society requires understanding insurance nuances. Vivek Chaturvedi, CMO and Head of Direct Sales, Go Digit General Insurance, says, “According to RWA (Resident Welfare Association) law, it’s compulsory for RWAs to obtain structural insurance for the building and common assets within the housing society. This legal requirement ensures that the entire building and its shared amenities are protected.” This community approach provides extensive coverage for shared spaces and structural elements, unlike individual policies that focus on personal units and their contents.
When an apartment is separately insured, claims pertaining to the building structure will be determined based on the carpet area declared at the time of purchase. Should the building be rebuilt, the insurer covers the apartment’s portion of the structure. “If the building is not rebuilt, the insurer will provide a claim based on the reinstatement value, covering the declared sum insured, carpet area, or cost of construction for the individual unit,” explains Dubey from policybazaar.com.
Protecting Your Belongings: Contents Insurance
To protect the contents within your home – furniture, appliances, electronics, and clothing – a separate ‘contents cover’ insurance policy is needed. Standard policies often include coverage for valuables such as jewelry and artwork, up to defined limits. However, for high-value items, a ‘Cover for Valuable Contents on Agreed Value Basis’ is recommended. Chaturvedi clarifies, “This allows you to declare and insure these items at an agreed-upon value, providing more comprehensive protection. Therefore, while basic contents are covered, valuables require separate declaration or a specialized add-on for adequate protection.”
Filing a Home Insurance Claim
In the event of a covered event, the insured should notify the insurance company as soon as possible. Submitting a duly completed claim form and the required documentation, as specified in the policy wording, is essential. The insurance company is available to provide needed support.
