House Holders Policy
Why buy Home Insurance?
Our home is probably the most expensive and most precious belonging which we have. We spend considerable amount of time and money planning to buy one and then making it into a “home”. Also, it is usually a once in a life time option for most of us and surely we want to ensure that our asset if completely secure. We may not be able to afford a second home or even have the resources to rebuild our existing home in case of any loss.
That’s where home insurance can be a very useful instrument to safeguard our belongings. Our home, its content and other risks associated with it can be made completely secure with a good home insurance policy. In case of any eventuality, we can be fully assured that the financial loss would be taken care of.
Householders or homeowners insurance, commonly known as home insurance, is the type of property insurance that covers private homes and various contents in it against a variety of risks. This insurance policy combines various insurance protections such as losses arising due to damage to one’s home and/ or its contents, loss of personal belongings or possessions of the homeowner and liability arising out of accidents that may happen at home. The policy document clearly lists down what will and what will not be paid in case of any unforeseen event.
The cost of home insurance usually depends on the cost one would incur to replace the house or its contents as covered under the policy and additional insured riders.
The coverage amount under the home insurance policy for the structure of the house is based on the reinstatement value. Very simply put, it would be the reconstruction cost of the house in the event of any loss and/ or damage arising due to any of the insured events like Fire, Storm, Riots, Flood, etc.
The policy is usually divided into various sections
Fire and Allied Perils like lightning, Acts of God, riot and strike, etc
Burglary and housebreaking including larceny and theft
Breakdown of domestic appliances or any accidental loss to them
T.V. Sets, VCR, Audio system, Music Players, DVD players
Baggage - either due to accident/ damage or while travelling
Accidental injury which causes death or total/ partial disablement
Public/ Third Party Liability
What is covered in a Home Insurance policy?
Broadly, the home insurance policy covers the building structure and contents, loss due to burglary/ theft, loss of jewellery or valuables, baggage loss, damage or loss of domestic and electrical appliances, damage to electronic equipments and other belongings like Pedal cycles, etc.
The policy generally covers the structure of your home and contents against
Fire, Lightning, Explosion/ Implosion
Riot Strike, Malicious and Terrorist Damages
Earthquake, Volcanic Eruption & other Convulsions of Nature
Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
Aircraft damage and Missile testing operations
Impact damage by rail/ road vehicle and animal
Subsidence and Landslide including Rockslide
Bursting and overflowing of water tanks, apparatus, pipes
Leakage from automatic sprinklers installations
What are the Exclusions in a Home Insurance?
The usual exclusions are willful destruction of property, any loss or damage to any property that is illegally acquired, kept, stored which is subject to forfeiture, any loss or damage by the insured and/ or insured’s domestic staff direct or indirect involvement in an attempted burglary, any loss caused by war, wear & tear, and/ or If the property was vacant for more than 30 days without prior notice to the company.
Any loss or damage suffered due to the following is treated as an exception and cannot be claimed:
a. Any loss or damage on account of loss of livestock, motor vehicles, pedal cycles, money, securities for money, stamp, bullion, deeds, bonds, bills of exchange, promissory notes, stock or share certificates, business books, manuscripts, documents of any kinds, unless specifically mentioned and valued.
b. Consumable articles.
c. Loose precious stones, jewellery or valuables, unless specifically mentioned and valued.
Therefore, yearly valuation plays a vital role in home insurance to ensure that claim becomes an easier process!
Salient Features of the Home Insurance Policy
1. The Householder Insurance Policy may be taken for any dwelling of Pucca construction.
2. 15% (fifteen percent) of the sum insured is waived for the purpose of under insurance for section I.
3. All items having value of more than 5% (five percent) of the total sum insured under Section I B should be separately specified along with their values.
4. Under the All Risks Section (Section III) any article valued at more than 10% (ten percent) of the sum insured has to be separately specified along with its value.
5. Jewellery and valuables kept in the bank locker may also be covered on first loss basis.
6. For taking coverage under more than four (4) sections 15% discount is allowed. For more than six (6) sections 20% discount is allowed.
7. Long term policy for upto 4 (four) years at discounted rate is also available.
8. There is no upper limit for sum insured either on building or contents.
9. The policy carries varying excess applicable to different sections.
10. Art-work, show pieces may be covered provided these are valued by Government approved valuers and their report is submitted.
11. Terrorism risk may also be covered at additional premium at the option of Insured and sole acceptance of company.
12. Housing societies having their own security arrangement can be given discount of upto 20% (Twenty Percent) for Section II. Housing societies can also be given Volume Discount.
13. The discounts may be granted in such a manner that the minimum net premium after allowing all discounts should not be less than 50% of gross total premium under the policy
14. The premium will be loaded by 10% / 25% depending on whether one policy period / two policy periods have been affected by claims.