Monsoon may bring relief from heat, but it also brings great risks. Umbrellas and rain-coats may save one from torrential downpour, but one needs to ask if they are doing enough to protect their homes? Heavy rains can cause huge damage to homes. The external structure may escape damage, but seeping water can inundate a home contents such as furniture, clothes, sports and electronic equipment, causing hefty financial loss.
It is estimated that 1% of homes in India are insured, which means 99% of homes are potentially exposed to rains and damages from monsoon.
Home can be insured under "Standard Fire and Special Perils Policy" which provides protection to your home building and contents against fire, natural calamities such as earthquake, flood, cyclone, storm and lightning and due to riots. Terrorism cover can also be opted as an additional premium. Someone in a rented house can also buy home insurance for its contents excluding the building. Long term policy from 3 to 10 years can also be available to cover the home building. Here is a simple guide for buying the right home cover this monsoon.
The right home insurance policy will cover maximum number of causes that damage property. Taking a Householder's Package Policy covering various other contingencies in addition to fire, burglary and housebreaking of contents, loss to jewellery and valuables, breakdown of electrical and mechanical appliances has its advantages. It simply means damages to domestic items, electrical (fridge and washing machine etc.), and electronic appliances (TV, DVD etc.), plate glass, and jewellery/valuables will be fully covered. Personal accident cover for family members and legal liability to domestic servants and third parties should be present in the policy. The package cover offers flexibility in choosing the sections as per the need of an individual.
Evaluate risks which your home is facing or might face in the future. For instance, if you live in a low-lying flood-prone area, then you should ensure the home insurance policy must cover risks such as inundation. There should be separate sub-limits for burglary & housebreaking protection, and for fire & allied perils (contents). Good home insurance policies will provide assistance for gadgets repair, plumbing/carpentry and pest control. Such assistance is provided free or at nominal cost and can be used many times in a year without making a claim.
Premium is payable at inception for one year standard fire policy as well as for a long term policy. The amount is very nominal considering the total value of property covered. For example, for a policy covering building valued at Rs 10 lakh for one year shall be about Rs 350. A long-term policy of 10 years can avail a long term discount of 50%. The GST applicable at present on insurance premium is an additional 18%.
Meanwhile, in case of a loss under the policy, immediate intimation should be given to the insurance company who appoint a surveyor to assess the loss. Intimation should be given either to the policy issuing office or to the call centre of the insurance company.
Purchasing the policy is very easy with most insurers having an online facility highlighting the salient features of coverage and the premium chargeable. An online quote can also be obtained by mentioning the value of property to be covered. Therefore in case you have already not, then its high time to go and protect your home and its content while you still have time.
The writer is ED and CEO, Reliance General Insurance