Have Questions Concerning Property Insurance? Read This

If you, as a homebuyer, thought that buying insurance was only an added burden and it might most likely not solve any purpose, you would better rethink. Your property, like all other things that you hold dear, needs a protection against untoward situations. That makes buying property insurance crucial. Before you make up your mind to buy such a product, you must have better clarity about home insurance policies.

The first question is, are there many types of policies?

Yes, there are 10-11 package policies for house owners and shopkeepers. While there are many products available in the market, the most popular is the fire and allied perils policy that protects your property against mishaps such as fire, riots, flood and storm. A burglary and house breaking policy on the other hand covers your property and belongings against burglary and theft. Other valuables can be covered under all-risks policies.

Also read: These Losses Are Covered Under Home Insurance

How does one fix the insurance amount?

There are two methods to do so. One is using the market value of the property and the other is using the reinstatement value.  Under the first arrangement, depreciation of value is levied on the asset, depending on its age in case of a loss. In this case, the insured amount may not be sufficient to buy a replacement. In the second arrangement, your insurer will pay the cost of replacement, depending on the ceiling mentioned in the policy. To claim the amount, the damaged property has to be repaired first. Do note that the second arrangement is allowed only for fixed assets such as property, it does not apply to liquid assets such as stocks.

What are my responsibilities as buyer of property insurance?

Buying a cover does not mean you have to be less careful about the well-being of your property. As the sector watchdog puts it, “every insured is expected to behave as though he is uninsured”.  This means you have to take every precaution to prevent losses. Do remember that you will have to prove it to the insurer that you did make an effort to save the property while a tragedy struck. In case you fail to do so, the insurer might be reluctant to settle the claim.

Also, in case of a tragedy, inform the insurer immediately. If arrival of surveyor is likely to be delayed, take picture of the scene. These would work as evidence.

While the company surveyor does his job, extend your full support and correctly mention the losses. Give the completed claim form and documents as required by the insurer in support of your claim.

After repairs, give bills to the insurer.

What if you have a grievance?

First, you approach your insurer. This could be done by personally visiting the company office or logging on to their site. As is the rule, your insurer has to acknowledge your complaint in three days, and resolve it in another 15 days. In case you are dissatisfied with company, you have the option to raise the issue to the sector watchdog, the Insurance Regulatory and Development Authority of India (IRDAI).

You may log on to www.igms.irda.gov.in to file your complaint.  

You may also lodge a complaint through an e-mail (complaints@irda.gov.in), through a letter (to Consumer Affairs Department, Insurance Regulatory and Development Authority, 3rd Floor, Parishram Bhavan, Basheerbagh, Hyderabad) or call IRDA Call Centre at 155255.

There are no charges for registering your complaints with the IRDAI.

What if insurer delays the process?

Suppose, there has been a damage to your property, and you have filed your claim with the insurance company. When you start losing patience because the company is not addressing the matter in a time-bound manner ─ it has been over a year ─ and approach the insurer over the issue, you find out that the company surveyor has yet to file his report.  How do you deal with that situation?

To begin with, do remember that:

• An insurance company surveyor has to give his report within 30 days of his appointment, unless he applies for an extension, citing matters of importance.

• This extension cannot be stretched for more than six months from the date of his appointment.

• In case of delay in payment to the aggrieved party owing to a surveyor's failure to give report, the insurer is liable to pay interest at a rate which is two per cent above the bank rate.

“There is no reason why an insured should suffer on account of delay on the part of the surveyor in submitting his report, considering the fact that the surveyor is appointed by the insurer without consulting the insured and in any case …  it is for the insurer to impress upon the surveyor to submit his report within the time limit prescribed,” says the National Consumer Commission.