August 17, 2017
Our society has done insurance for the building for a certain amount. What are the aspects that the insurance of a building typically covers and why?
Typically, a society takes the insurance of building for standard fire and special perils, which covers perils such as fire, lightning, explosion, aircraft damage, riot, strike, malicious damage, storm, tempest, flood and inundation, impact damage, subsidence and landslide/rockslide, bursting and/or overflowing of water tanks, apparatus and pipes, missile testing, leakage from automatic sprinkler installations and bush fire. Earthquake and terrorism are add-on covers, which can be opted for by paying an additional premium.
As cooperative housing societies are entrusted with managing administration as per guidelines of cooperative housing societies act and insurance is part of society administration, the societies have to take insurance.
What would normally not be covered?
The policy does not cover consequential losses, losses on account of delay, warlike perils etc., losses caused by pollution or contamination, bullion or unset precious stones, any curios or works of art for an amount exceeding Rs.10000 or currency unless expressly stated in the policy.
Is a comprehensive policy available that covers the structure as well as contents of individual flats?
Yes, individual flat owner can opt for comprehensive policy such as the home package policy, which includes the coverage for building and contents against the risks of fire and other allied perils as detailed above. Home insurance policy also offers other covers as burglary for contents, electronic equipment insurance for electronic items, machinery breakdown insurance for household electrical / mechanical items such as air conditioner, washing machine, refrigerator etc., personal accident insurance, workman insurance for domestic servants, all risk insurance of jewellery and valuables and laptop etc.
In case of a calamity, what happens if individuals have insured their flats but the building itself is not insured?
Claim will be payable to individual owners only for the assessed loss not exceeding the sum insured under the policy.
What type of insurance policy should housing societies and their members ideally opt for?
Housing societies can opt for fire insurance including flood and earthquake for the building. They may also take insurance covering their other exposures. Burglary, money insurance, workmen insurance, public liability, machinery breakdown for DG set/ pump house etc., are some of the other policies, which they can consider taking. Individual flat owners can opt for fire insurance including flood and earthquake for contents, burglary for contents, electronic equipment insurance for electronic items, machinery breakdown insurance for household electrical/ mechanical items such as air conditioner, washing machine, refrigerator etc., personal accident insurance, worksman insurance for domestic servants, all risk insurance of jewellery and valuables and laptop etc.
Is any tax deduction or rebate available?
As of now, there is no such provision available for any tax savings.
How can one make an 'apples to apples' comparison of property insurance options?
All insurers use the same wording for standard fire and special perils policies and add on covers like earthquake, terrorism thereof. However, companies have customised home insurance covers. Even here, the wording for fire insurance cover conforms to the standard fire and special perils policies wording.
Generally, the additional covers like burglary for contents, all risks for valuables, breakdown cover for gadgets etc., are comparable across products sold by various companies.
Ideally, the customer should take an insurance policy which adequately covers his requirements. All that the insured has to do is to prepare a list of assets he has at home and map them against the various insurance covers available under the home insurance policy.
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Source: DNA Newspaper