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Home insurance can minimise financial loss

Last Updated 17 September 2017, 18:32 IST

In India, many working individuals aspire to be competent enough, that they can afford to invest in buying their own abode and consider it as a yardstick of achieving success.

An uncertain incident such as fire, which may also be sparked due to the negligence of a third-party can burn away your house in ashes. Unfortunate natural catastrophic events like floods and storm / earthquake can cause devastating damages to the property and the contents of the house.

So how does one address and mitigate the above risks that stare in the face of a home owner? Fortunately, a ‘Home Insurance’ policy, which is now available in the market and can also be bought online, can minimise the financial loss which one bears for the damages caused to their home/property as well as the contents inside the home.

A home insurance policy is provided by General Insurance companies and sometimes, banks or mortgage companies that provide you a home loan. These mortgage companies and banks tie-up with general insurance companies to issue such policy to their customers in the interest of protecting the assets.

Scope of coverage

Cover for structural damages: In case the house or the bungalow develops structural damages due to lightning, floods, storm, bursting or overflowing of water tanks and pipes, the insurance company after assessing the losses through an appointed surveyor will reimburse you towards structural repairs of the damaged section.

Cover for damages caused due to fire: A house is highly susceptible to incidents of fire. It may arise due to an electric short-circuit or through gas leakages in the kitchen. Chances of third-party negligence are also high and cannot be ruled out. So if your house is damaged due to fire, insurance companies would compensate you for the losses due to fire.

Cover for home contents: Contents such as television sets, white-labels goods, and furniture items can also be covered, if the customer opts for a Content Insurance. Under this cover, damages caused to the contents due to the above perils such as fire, lightning, floods, will be compensated for a certain sum insured as per the policy wordings of the insurance company. It is important to keep the original receipts of the purchase of the goods bought so that it can come handy during the claim process.

Cover for jewellery and other valuables: Precious possessions such as jewellery and watches including precious stones etc. whilst kept in your house/bank locker or worn during travelling or in any social function, are covered for losses due to fire, theft, robbery or any other fortuitous event, if the customer opts for ‘All Risk’ Insurance. The coverage can also be extended to “curios, works of art and paintings” whilst stored or lying in your building.

Cover for burglary:  Anti-social elements in the vicinity may pose threat to your life as well as towards burglary. The home insurance policy would compensate you for the loss as specified in the policy wordings and after all the necessary police reports and papers are provided to the insurance company.

Cover for plate glass: Glasses are expensive and fragile, adding elegance to your home. Plate Glass Insurance covers all kinds of accidental breakages of the plate glass fixed to windows or show cases. The cover also provides protection for loss or damage to ornamental, embossed, lettered or stained plate or sheet glass.

Cover for electronic appliances: This cover indemnifies you in respect of the accidental loss or damage to “electronic equipment” anywhere in India. Electronic equipment such as personal computers including printers and other peripherals, TV, DVD players etc. are covered against any loss due to a fortuitous event including  breakdown of electronic equipment.

Just like any other insurance policies, home insurance coverage can be enhanced by opting for certain add-on covers for comprehensive protection, such as:

Covers for earthquake: An intense earthquake of few seconds can bring down the entire building into shambles. Though most of the housing societies in the urban area have an earthquake cover, private bungalows should consider opting for this add-on cover.

Cover for personal accident: Bodily injuries or death due to the above perils can be equally devastating for a family. Any bodily injuries that cause permanent and temporarily immobility incur medical cost for recuperation. In the case of death, the loss is irrevocable if the bread-earner is the deceased. A personal accident cover would act as a financial support to the family members.

Cover for alternate accommodation: For a house that has completely been destroyed due to fire or structural damages, residing back in it immediately is not possible. In the interim, till the house is put back to its order, customers can avail for alternate accommodation feature of the home insurance policy. In this scenario, the insurance company would pay for the rental accommodation of an alternate flat based on the mutually agreed price for a period of one year.

Apart from being the most valuable investment for an individual, a home is also an abode for family well-being, emotions, love and security. A thought of protecting it is battle half-won against uncertainties of life.

(The writer is MD and CEO at Universal Sompo General Insurance)

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(Published 17 September 2017, 17:50 IST)

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