Insuring your home

The most valuable life time savings of a man is his house. The household goods and personal belongings represent many years of financial and emotional investment for your entire family. All these may be lost due to theft or natural calamities, like earth quake, floods, short circuit  or fire.  Unfortunately if anything occurred  like that,  the worries about losing your property and setting all the things all over again will cause great mental agony. Be it a hut or a Bungalow, rented or owned, it is advisable to insure your house and belongings to guard against unforeseen risks.

House Holders insurance policy is one of the most popular forms of insurance today.  The house insurance protect your home from unpredictable events. In addition to protecting your home, the typical home insurance covers your valuable personal property as well. Your personal property consists

of the contents inside your home like furniture, clothing, stereo, computer equipment, jewelry etc.  All those expensive items or consumer durables you bought over a period of time may get stolen /damaged by unforeseen calamities. In such cases, your insurance company will take care of the losses and indemnify you for it.

General Insurance Corporation of India through it subsidiaries like United India Insurance, Oriental Insurance, the National Insurance Company, New India Assurance etc will give you guarantee for your house and valuables and give you peace of mind from all the unpredictable risks. Besides the government companies there are also several private companies which offers Insurance schemes such as Royal Sundaram Alliance, ICICI Lombard, Tata-AIG, Bajaj Allianz General Insurance Company etc.

There are lot of schemes available in home insurance.  Under the House Holders insurance policy, coverage is available for 10 sections. You can choose a comprehensive cover or separate cover. If you choose a comprehensive cover, all these 10 sections will get covered in one, else you can choose the sections in which you want coverage. But in case of public sector companies, it is compulsory to take the coverage of a minimum of three sections of which the first two sections namely fire coverage and burglary are compulsory. In case of private sector companies, only the first section is compulsory. 

House holders policy has to be renewed every year. If you take 5-6 sections, you're entitled to a 15 per cent discount on the premium on the optional sections and for taking more than seven sections, you get a 20 per cent discount on the premium.

The 10 Sections include

1. Basic Policy ( Fire Coverage) has two subsections- one covers the building and the other its contents against damage from fire and allied perils, specifically structural and other damage from fire, lightning, riots, explosion of gas in domestic appliances, riots and natural calamities such as floods and earthquakes. This policy excludes jewellery and valuables

2. Cover for loss/damage due to Burglary excluding jewellery, gold and silver articles, securities, cash-and televisions and bicycles which are covered under other sections.

3. Cover for 'all risks' against loss or damage to jewellery and valuables

4. Cover for damage or loss to fragile items like glass ware including plate, glass etc.

5. Cover for accidental breakdown of electrical, electronic and mechanical gadgets like refrigerators, air-conditioners, microwave ovens, washing machines or motor pumps

6. Cover for loss / damage to television sets, VCDs/VCRs/VCPs and computers against all types of risk-fires and allied perils, theft and accidental breakdown. 

7. Cover for loss or damage to a bicycle

8. Cover for loss of or damage to baggage while you're travelling in India

9. Cover for personal accident.

10. Covers your legal liability to a third party for personal injury or property damage

Besides the House holders Insurance policy, there is also an exclusive Fire Policy for covering the building and contents against the perils of fire, lightening, floods, earthquake, storm etc. This policy can be taken for a period of five or ten years. The longer the term of the policy, the more the discount on premium.

Things to know while insuring your home

• Be truthful to state the correct value of whatever you insure to the Insurance company. You may  need to pay higher premium if you state more, but the actual value is needed for adequate coverage.

• In the case of appliances, elaborate details of all the items including the model number, name of manufacturer, year of purchase, value and any peculiar specifications need to be mentioned for easy settlement of claims.

• In the case of appliances, care should be taken to see that the sum insured cover the replacement value of the appliance. For. eg. the resale value of an appliance after some years will be much less than its replacement (purchase of a new one ) value. So in case of breakdown, you wont be eligible for full settlement unless your insurance cover the replacement value.  

• If you replace any insured item or acquire a new one, please make it known to the Insurance company.  Then the policy needs to be revised.

• Inform if there is any change in your address, else the company can ignore your claim totally. 

• If you are leaving the house for more than four years, you must inform the same. 

Normally the premium for loss/damage to the house against fire, natural calamities ranges from Rs 60-65 for one lakh coverage. If you need additional cover for terrorist attacks the premium will be 95 Rs.  The premium for insuring your home against theft varies from  Rs 25-30 which will cover your property and valuable against burglary, theft and house breaking.  The premium can be paid annually.