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Your guide to home insurance

Larissa Fernand

How much do you know about insurance? Besides insuring yourself for illness, have you ever considered insuring your home or your valuables? After all, you may be in possession of a whole range of CDs and have a fabulous home theatre too. And while you are not afraid of theft, there could be an accident or fire. Here is what the General Insurance Corporation of India (GIC) offers through it subsidiaries: United India Insurance, New India Assurance, Oriental Insurance, and The National Insurance Company.

You can choose between a comprehensive cover or a separate cover. Under the home insurance policy, there are 10 sections. If you opt for a comprehensive household insurance policy, all these 10 get covered in one go. If you opt for a separate policy, then you can pick and choose the sections on which you want coverage. But you have to take a minimum of two: the burglary and the fire coverage.

What you should know before taking a policy

• Be truthful when filing your claim. If you feel that your wardrobe is worth Rs 15,000, then state that. Sure the more you state, the higher the premium. But if you give a figure of Rs 10,000, then when settling your claim, the insurance company will not exceed this amount.

• If you replace any insured item, inform the company. If you replace an old music system with a new one, the company will then increase the premium on you intimidating them. But if you have to stake a claim, the price of the new one will be valid.

• In the case of electronic goods, depreciation is taken into account. Not so in the case of other items like a camera. In the case of jewellery, there is no depreciation unless gold prices have fallen. Then it is valued at the current gold rates.

• If you own paintings, the value may appreciate every year. So make sure that you give the current value every year when the policy is up for renewal.

• If you don't inform the company about a change in address, they can ignore your claim totally.

• If you are going to be leaving your house unoccupied for more than four months, the insurance company has to be notified.

What you should know when filing for a claim

• When the claim is a large one, the insurance company will send a surveyor to check the damage. This will either be an individual or firm licensed by the Insurance Regulatory Development Authority.

• In case of a fire, the fire brigade report is a must before filing a claim.

• If the cause of damage has been a flood or earthquake, you may have to prove that the natural calamity did occur. Newspaper articles and photographs or even a report from the meteorological department would help. In such an instance, a trip by the surveyor to your home to see the damage may also suffice.

• In the case of a theft, a first information report (FIR) from the police is mandatory. And, the insurance company may want to wait till the police have given a final investigation report. That means, the police will have to state whether the case is closed or has been solved.

• You will have to prove that the burglary did not occur because of any carelessness on your part. For example, evidence such as broken doors and windows to show forced entry. If the surveyor finds that there are no bolts on your door or no grills, you may not be able to stake your claim.

• Where goods are concerned, such as televisions and music systems, keep the cash memo to show how much you paid for it and when. As for jewellery, you have to provide details like weight and design.

• The all-risk section which insures valuables against almost all manner of threats, is a good one to have. So even if your househelp has stolen something or you accidentally left your ring in the hotel room, you can make a claim. But, you have to convince the surveyor that the loss was entirely unintentional. You can lodge a FIR even if no third party is involved and you are responsible for the loss.

• In the case of glass, you have to prove that the damage was caused by malafied intent and not your child slamming a ball into it.

• As for death, a port-mortem report is a must. If it is found that the personal was suffering from, say, high blood pressure and consequently felt dizzy and met with an accident, then the claim may not be honoured. If the individual was under the influence of alcohol at the time of his death, the claim is not valid.

What the policy covers

Focus: Insures your house against fire, natural calamities like floods, storms, cyclones and earthquakes, riots, terrorist attacks, gas cylinder explosions.
What's covered: Loss the building and its contents.
What's not covered: Loss or damage to documents, bonds, securities, precious stones, jewellery, cash, valuables.
Cost: Rs 0.6 per Rs 1,000.

Focus: Theft.
What's covered: Property and valuables against burglary, theft and housebreaking .
What's not covered: Loss and damage to animals, motor vehicles, bicycles, documents, bonds, securities, jewellery, cash, valuables.
Cost: Rs 2.40 per Rs 1,000.

Focus: All risks.
What's covered: Loss and damage to jewellery, valuables (cameras, trinkets) due to accident or misfortune.
What's not covered: Loss due to cleaning, dyeing, repairing, moth, mildew, while being carried by a carrier under a contract of carriage.
Cost: Rs 10 per Rs 1,000.

Focus: Glass
What's covered: Accidental breakage of fixed glass (glass doors and windows) in the insured building.
What's not covered: Breakage to frames, breakage or disfigurement of lettering on the glass, breakage during removal, alteration or repairs.
Cost: Rs 10 per Rs 1,000.

Focus: Domestic appliances.
What's covered: Damage to domestic appliances (mixer, refrigerator, washing machine) due to mechanical or electrical breakdown.
What's not covered: Loss or damage due to faults existing before insurance or for which the manufacturer is responsible, negligence.
Cost: Rs 2.50 per Rs 1,000.

Focus: TV/ VCR/ VCP.
What's covered: Loss or damage by fire and allied perils, burglary, theft, accident, mechanical or electrical breakdown. If it causes physical injury to someone, the policy provides a legal cover up to Rs 25,000. If the TV antenna collapses and damages your home, you could get as much as Rs 3,000.
What's not covered: Loss or damage during installation, repairing, dismantling or falling under manufacturer's/ supplier's guarantee.
Cost: Rs 10 per Rs 1,000.

Focus: Bicycle
What's covered: Loss or damage to bicycle by fire and allied perils, burglary, theft, accident, legal liability for bodily injury or property. The latter means that if you knock someone down, you are covered against a legal liability of upto Rs 10,000.
What's not covered: Loss or damage while racing or when given on hire, mechanical breakdown, theft of extra fittings only on cycle.
Cost: Rs 20 per Rs 1,000

Focus: Baggage
What's covered: Loss or damage to the accompanied baggage of the policy holder by accident or misfortune while traveling in India. Cover extends to a maximum of Rs 10,000 and you are entitled to compensation only if the loss occurs while traveling outside the city you live in.
What's not covered: Cash, jewellery, travel tickets, edible articles.
Cost: Rs 7.50 per Rs 1,000.

Focus: Personal Accident
What's covered: Death, disablement and injury caused anywhere in the world by accident to policy holder, his spouse and children.
What's not covered: Natural death, war, nuclear risks, self injury, suicide.
Cost: Rs 0.60 to Rs 3 per Rs 1,000.

Focus: Public liability
What's covered: Legal liability to third party for personal injury or property. So if your dog bites someone or you break your neighbours wall (unintentionally of course), legal damages will be covered up to Rs 25,000 should he decide to sue you.
What's not covered: Liability to family members of the policy holder and liability for accidents involving animals, vehicles and so on.
Cost: Rs 0.50 per Rs 1,000.

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