Whenever a natural calamity strikes anywhere, we start thanking God for protecting us from any such mishappenings. After all, it is ‘some others’ who became victims of the nature’s fury. But you don’t always get a safe escape in your life. What would happen if the next time, natural disasters hamper your life? Life comes to a standstill when the Mother Nature comes down in all her fury and the destruction she brings with her leaves pain in the heart of affected people.
The house which took years to build got destructed in a wink of seconds. While there is little one can do to evade natural disasters, it is possible to curtail the financial setback with the help of home insurance. But unfortunately, as per ICICI Lombard’s survey, 93% respondents did not have a home insurance policy in India.
Some people avoid the policy as they consider it complex to understand. While it is imperative to buy home insurance, it is equally important to understand the policy in detail. So, here we give answers of some of the common questions to clear your doubts so that you go ahead and buy the policy. Let’s clear the air:
- Does the home insurance policy cover losses due to negligence of tenants?
If you have given your house on rent, it is possible to take insurance for the structure as well as for the content. Further, damages caused due to insured perils may get covered unless caused by a willful act. Since there are only a few insurers who cover losses caused due to negligence of tenants, it is always good to check the policy details beforehand.
- I am sharing my apartment with my friends; can I still purchase home insurance?
If the house belongs to you, then you can buy the insurance to cover both the structure and content of the house. In your case, your friends can also buy the policy for their part of the content. However, insurance companies may deny you the policy if it gets difficult to segregate your content with that of your friends.
- Should I buy home insurance if I am living as a tenant?
Even if you are a tenant, you should buy home insurance to cover the content of the house. Also, in case you move out to another place, you can get your home insurance policy endorsed for a change of address.
- What happens to the policy if I sell the house?
In case you sell the house, it is important to inform the insurance company and get the policy cancelled as you no longer have any insurable interest in the property.
- What happens at the time of claim settlement if I have taken only a partial cover for content?
If you have not taken an adequate cover, it is called under insurance. Usually, most of the policyholders think that their entire property will not get damaged in a single event. As a result, they buy only partial cover. However, in this case, if a loss arises, the insurance company will cover only the partial loss and the remaining loss has to be paid by the policyholder. For instance, if you buy a cover of Rs 10 lakhs only for the artwork of Rs 20 lakhs, the insurer will pay only Rs 10 lakhs at the time of claim even if the entire work gets damaged.
- What if I take home insurance policies from two insurers, how my claim will be settled?
In case you have home insurance policies from two insurers, you will be paid on a proportionate basis in the event of a claim.
- How is home loan insurance different from home insurance?
Home loan insurance insures the home loan which you take for buying the house, whereas home insurance covers the structure and content of the house. Home loan insurance doesn’t cover home and its content as it financially helps the family in case of death of the policyholder. The insurance coverage is used to repay the home loan amount. However, home insurance covers the content and its structure from both man-made and natural calamities.
- Will the insurer cover if my house was unoccupied at the time of damage?
Generally, a policy holder needs to inform the company if the house would be unoccupied for a long time. However, as the definition of non-occupancy varies, it is advised to cross check the same with your insurer.
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- If rain floods my basement, will the damages be covered?
Yes, the insurer will cover it if you have declared the same in the proposal form at the time of buying the policy, and the sum insured has been calculated after including the basement value.
- How should I file my claim?
In the case of loss, you need to inform the insurance company. Once the information is received, the insurance company will deploy the surveyor, and the claim will be settled once the insurable interest is identified and losses are assessed. You need to present KYC documents so that the insurer can identify the claimant.
If the claim arises due to natural calamity, insurance companies relax the procedure that involves minimum documentation. During this time, the insurer may only ask for the year when the policy got issued to settle the claim.
Do remember, there are certain situations which might not be covered by your home insurance policy, but it is still better to have one than having nothing at all.