Do not neglect home insurance

Building Insurance: This provides cover to any form of building or the structure of the building against damage due to man made reasons or natural calamities to the extent of providing for the entire cost of reconstruction in case the building suffers complete destruction. The conditions under which insurance is valid includes:

Fire,explosion of any domestic appliance like cooking gas

Damage due to riot,strike etc

Natural calamities like storm,flood,cyclone or earthquake

Damage caused by aircraft

Loss due to third party liability or personal accident

Subsidence and landslide including rockslide

Bush fire

Lightning and impact damage

Content Insurance: This provides cover to the contents in the house such as jewellery,movable goods and any valuable item which is not fixed to the home like electronic goods,clothing or furniture. There are various types of covers available with different insurers which the customer can choose from. The contents of the home are provided cover against loss or damage due the following reasons:

Theft

Explosions

Storm or fire

Loss of valuables like jewellery,crystal,crockery

Accidental damage of plate glass fixed in windows and doors

Damage or loss of electrical appliances

Key points

Before buying home insurance do take note of the following:

Read the fine print: what is covered and what is excluded.

Make inventory of contents,estimate market value and have ownership documents of contents.

Ascertain periodicity of renewal and stick to it.

Age doesn’t affect premium cost but some insurers refuse houses more than 50 years old.

Cover against terrorism is optional.

No claim for loss of cash or jewellery with value more than Rs 15,000 or if they were not included in the proposal

In a rented house only the contents can be insured and not the structure.

Insurance cannot be bought if it is being used for business purposes.

No claim permitted if house is unoccupied for more than 60 days (30days in some cases).

Standard Exclusions:

Wilful destruction of property

Loss,damage or destruction caused by war perils

General wear and tear and atmospheric conditions etc.

Damage due to an act of terrorism(unless specifically covered)

Valuation Procedure

Sum insured towards the structure of the home is evaluated based on the reconstruction or reinstatement value of the property whereas the sum insured towards the contents of your home like electrical appliances,clothes,furniture,jewellery,crockery are valued based on their market value after calculating depreciation.

GETTING THE BEST DEAL

Opt for a long term policy of about 10 years as it saves effort on renewal and also gives huge discounts of up to 50 per cent.

Ensure that cover increases as the market value of property increases.

Choose a plan that allows non-occupancy up to 60 days.

Compare policies and decide on amount of cover required. Bargain with the insurers’ agents.

Try to combine the structure with content insurance to avail some more discounts.

The premiums of the home insurance policies are quite low and cannot be negotiated much lower in most cases. For a house value of say Rs 50 lakh,and the total market value of items such as jewellery,furniture appliances etc at Rs 9 lakh the annual premium for a cover from Bajaj Allianz is Rs 8,275,from Tata AIG it is Rs 8,801 and from ICICI Lombard,it is Rs 11,302. However,this small investment can be hugely handy in handling the unforeseen.

—The author is CEO,BankBazaar.com