Given the relatively low premiums, and consequently low commissions to insurance brokers, salespeople don't aggressively push these products. So, it's up to you to seek them out.
To decide which policy to buy, first determine what you want covered.
Structure insurance "is a must for anyone who owns a house," says Suresh Sethi, chief executive of Delhi-based firm RIA Insurance Brokers Pvt.
If your home or building is damaged due to specified events, the insurer will pay you the money needed for reconstruction.
The amount of money paid will be determined based on the cost of construction at the time of the event. If you have used expensive tiles or fittings in your home, inform the insurer before taking the policy, otherwise you'll have problems when making a claim afterward.
Mr. Sethi explains that insurance companies have a standard rate at which they pay structure claims depending on the neighborhood. For instance, the company will assume that in the Lajpat Nagar neighborhood of Delhi, the cost of constructing an apartment is an average of 800 rupees ($18) per square foot, while in posher Defence Colony nearby, the cost of construction is, say, 1200 rupees ($27) per square foot. Unless you specify in advance, you'll end up getting these rates at the time of making a claim, irrespective of what you spend. The premium for a standard structure policy is 50 or 55 paise per 1,000 rupees of sum assured.
While structure policies from most insurance companies are quite similar, home contents policies give you a choice about what type of coverage you want.
So, you can choose to cover your contents only against natural disaster, or also against burglary and theft. Insuring jewelry or electronic items may cost you extra.
While coverage against earthquake and floods is good, more often than not you'll need insurance for other events. "Common claims that we get are for burglary and are about minor damages that happen due to rains," says Pranay Shah, vice-president health and home products, ICICI Lombard General Insurance Co. So make sure to get cover against these events.
Getting insurance for home contents can be useful for both owners and tenants but these policies have a few drawbacks. If you have burglary coverage, some policies don't cover theft if your home was unoccupied for two months. Many companies don't cover theft committed by a house employee such as a maid.
Second, for electronic items that are a few years old, you likely won't get enough reimbursement to cover the cost of buying the same electronics again.
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