General Insurance: K K Mishra

Last Updated: Wed, Sep 26, 2012 12:13 hrs

I am 49 and have recently moved into a new house in Andheri, Mumbai. I am planning to buy a home insurance policy. How much should one typically cover his/her house for? Which items are covered under this policy?
Home insurance or the 'house holder' policy as it is commonly called, has two major covers. The first one covers structure and contents against fire/allied perils, which include 14 covers such as fire, lightning, flood, storm, inundation, landslide, explosion and so on. The second cover is for burglary and theft. The cover required is dependent on the goods one wants to protect. The customer has to decide the home cover based on his or her needs. For example, if the house is owned, it needs to be insured, but if it is leased, the contents do not belong to the home owner and he or she does not need to take insurance for the contents. If a person lives in his or her own house then it is advisable to insure both the structure and the contents.

The fire and allied peril cover of the policy is priced at the fire tariff rate. Customers can opt for covers like burglary/theft, breakdown and jewellery. Discounted premiums are offered on the number of sections or covers that one takes. There are long-term covers available for a structure where the cover period can range from 3 to 15 years. The long-term policy offers discount on the premium which can be as high as 50 per cent if the period is 10 years or more. It is advisable to opt for home insurance depending upon your needs and not base the decision on the cost of premium.

I read as insurer is looking to launch an unemployment cover. How helpful would it be?
This cover assumes a lot of importance considering the current slowdown in the economy with many employees getting laid off from their current jobs. The unemployment cover is helpful as it covers the credit risk of a person during a loss of job. This product primarily addresses the short-term needs of an employee and usually covers instalments on various loans such as for vehicle, home or consumer durables for certain period (three months). It may be offered as a rider on a suitable policy or as a standalone cover as well.

Apart from the fine print and exclusions, what else should one look at while buying a general insurance policy?
The most important thing you should know while buying an insurance policy is that the company from which the policy is purchased has a good brand name, wide geographical presence, and a strong record of transparency, good claims handling and policy servicing capabilities. We always advise customers to first evaluate their needs and requirements prior to purchasing any general insurance policy.

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