Why ULIP mis-selling has become rampant ?

A home insurance policy offers comprehensive coverage for your home and its contents at an affordable premium rate. Many add-on covers can be opted for like loss of rent and personal accident cover making home insurance an indispensable means for protecting your most valuable asset. The good news is most insurers have started offering this insurance cover from April 1, 2021, following the insurance regulator directive that all general insurance companies need to offer a standard insurance policy.

Here are nine features of the Bharat Griha Raksha, a standard home insurance cover, to help you understand the policy better:

1) Coverage

The standard policy covers physical loss or damage, or destruction caused to the insured property by fire, explosion or implosion, lightning, earthquake, volcanic eruption, or other convulsions of nature. It also covers storms, cyclones, typhoons, tempests, hurricanes, tornadoes, tsunami, floods and inundation, bush fire, forest fire, jungle fire. It also covers impact damage of any kind like the collision caused by any external physical object such as a vehicle, falling trees, aircraft, walls etc.

It also covers bursting or overflowing of water tanks, apparatus and pipes and leakage from automatic sprinkler installations. Moreover, it covers damages caused due to missile testing operations, riots, strikes, malicious damages and acts of terrorism.

2) Architect fees and loss of rent

The policy covers architect’s, surveyor’s, consulting engineer’s fees, cost of removing debris as specified under the policy. Further, the policy also pays for loss of rent and rent for alternative accommodation, which will be paid to the extent declared by the policyholder while the home is not fit for living.

3) Sum insured

If the policy period is more than one year, it will automatically increase the sum insured during the policy period by 10% per annum on each anniversary of the policy without additional premium for a maximum of 100% of the original sum insured. The sum insured will be automatically increased each day by an amount representing 1/365th of 10% of the sum insured.

4) Waiver of underinsurance

The clause means that if the sum insured calculated on the basis of the information provided is less than the actual value at risk, the difference will not affect the amount the insurance company pays. The full amount will be paid to the policyholder without any proportional deduction.

5) Restoration

If you claim any losses, the policy shall be restored to the full original amount of the sum insured. The policyholder needs to pay the insurance company the proportionate premium for the unexpired policy period from the date of loss. The insurer can also deduct this premium from the net claim that is paid to the policyholder.

6) Reimbursement

The insurance company reimburses the cost to repair to make its condition similar at the time of damage. Besides, the insurer also pays up to 5% of the claim amount for fees of the architect, surveyor, consulting engineer and up to 2 % of the claim amount for costs of removing debris from the site.

7) Theft

The policy offers coverage against theft within 7 days from the occurrence of and proximately caused by any of the listed insured events.

8) Home content

The policy has a built-in cover for the contents of home equal to 20% of the sum insured for home building cover subject to a maximum of Rs 10 lakh, provided the policyholder has opted for both home building and home contents cover. The insurer pays you the cost of replacing that item with the same or similar item.

9) Additional covers

The policy also offers additional coverage such as valuable contents on an agreed value basis under home contents cover and personal accident cover which pays the compensation of Rs 5,00,000 per person.