Frequent cyclones and floods in different parts of the country leaving behind damaged buildings have underlined the importance of a home insurance policy. After the insurance regulator’s guidelines, general insurance companies have launched the standard home insurance—Bharat Griha Rakshak policy.
The standard policy covers natural catastrophes, fire, any kind of impact damage, strike, riots, etc. Along with the home structure, it covers home contents such as furniture and white goods. The owner or a tenant of a building used for residential purposes can buy it. The policy duration is one to 10 years and the age of the building must be less than 40 years. The maximum amount paid under the policy is the sum insured based on the prevailing cost of construction of the building at the policy commencement date and the premium is calculated based on the sum insured.
The Bharat Griha Rakshak policy has in-built cover for home contents which is 20% of the sum insured of the home building, subject to the ceiling of `10 lakh. In case of only home contents cover, the sum insured for general contents will have to be declared and must cover the cost of replacement of the contents. The policy covers all fittings and fixtures, additional structures like garages, domestic outhouses for residence, compound walls, fences, gates, retaining walls and internal roads, parking space, water tanks for residents and parking space.
The policy also offers two optional covers—cover for valuable contents like jewellery, silverware, artifacts; and personal accident cover for the policyholder and spouse where insured peril causes damages to home building and/or home contents and also results in the death of either or both of them. The compensation amount will be Rs 5 lakh per person.
The standard policy offers in-built covers such as loss of rent and rent for alternative accommodation if the home building is not fit for living because of physical loss arising out of an insured event. It also covers for removal of debris (up to 2% of the claim amount) and payment of architect’s, surveyor’s and consulting engineer’s fees (up to 5% of the claim amount). Experts say such a policy can help in increasing the penetration of home insurance which is very low in the country.
For a long-term policy, the sum insured for the home will increase 10% every year for a maximum of 100% of the sum insured at the policy commencement date without any additional premium. One of the biggest benefits of Bharat Griha Raksha is that underinsurance does not apply to the policy. It means that if the sum insured calculated on the basis of the information provided by the owner is less than the actual value at risk, the difference will not affect the amount that the insurance company will pay to the owner in case of any claim. The premium for the home building cover and the home contents cover will depend on the amount of sum insured and factors that define the risk profile of the building.
How to file a claim
In case the insured has to file a claim, he should first inform the insurance company by giving details of the policy number. The claim form must be submitted within 30 days from the date of the loss or damage. He should give a brief statement of the loss, details of report to the police or any authority, particulars of any other insurance of home building or home contents. Then he should submit photographs of loss or physical damage and assist representatives from the insurance company in collecting evidence and details.