These Losses Are Covered Under Home Insurance

At the time of buying his house, Abhinav Chandra, a school teacher by profession, also applied for a property insurance policy to insure his most valued asset. But, by an unfortunate turn of affairs, half of his property was damaged owing to a fire due to over-running of bathroom geyser. When he approached the insurer to claim the loses, the provider told him this event was not covered under the policy he has taken. Chandra knew his policy covered losses owing to fire and other such perils; he did not know that there is another clause in the policy that restricts his claims to insurance.  

This is precisely why you must know what all your home insurance policy covers. The whole purpose of buying an insurance policy will be lost if you signed the papers without realising what all is covered under the policy.

Under cover

After you buy a home insurance policy, your insurer will cover losses to the structure and content of your home. The reasons for these losses could be man-made as well as natural calamities. Typically, property insurance covers losses owing to natural disasters such cyclone, flood, lightening and storm. Under man-made disasters, losses incurred due to fire, aircraft damage, riot, strike and missile-testing are included.

Do note that protection against earthquake and related tragedies is generally not covered in an insurance policy. If you want to opt for that, you have to specifically pick that option and pay an extra premium for that. Same is true of burglary and theft cover.

However, there are certain riders here. To claim losses under burglary, it must be insured that the contents covered — jewellery, precious stones, etc. — are kept in a locked safe.

What is not covered?

It is equally important to understand what damages are excluded from property insurance policies.

• Year after year, your property might undergo a depreciation in value owing to slow structural decay. You cannot claim losses for this under a property insurance policy.

• Because insurance providers do not offer cover in case your property is damaged owing to a fire caused by over-running of electronic equipment, Chandra was denied a claim by his insurer.  

• Even if you have bought a cover against theft, loss of cash is not covered in an insurance policy.

• In case your property is damaged during an invasion by or war with a foreign country, no claims would be entertained by the insurance provider.

Point to be noted

A home insurance policy does not cover the entire value of your property which includes the costs of the land, the building and the locality. A property insurance covers only the building cost of your home.

Also read

How An Insurance Policy Works In Case Of Burglary