FAQs: Part 3

Consumer Voice - - Bfsi -

Why should any­one in­sure a build­ing? Fire can't pos­si­bly do any harm to the build­ing? Fire and other per­ils (nor­mally cov­ered un­der a fire in­sur­ance pol­icy) can cause loss/dam­age to build­ings. There have been fire ac­ci­dents that have com­pletely de­stroyed mul­ti­storey build­ings. Floods can also bring about dev­as­tat­ing losses. Sim­i­larly, ri­ots and acts of ter­ror­ism can also cause huge losses to hu­man lives as well as prop­erty. One has taken an in­sur­ance pol­icy cov­er­ing his build­ing. The bank that has fi­nanced his busi­ness has also taken in­sur­ance separately. Both poli­cies are in force cov­er­ing the same prop­erty. How then is a claim set­tled? In the event of a claim, each in­surer will pay the loss amount in pro­por­tion to the sum in­sured un­der their re­spec­tive poli­cies, in ac­cor­dance with the prin­ci­ple of con­tri­bu­tion. The ob­ject of the prin­ci­ple of in­dem­nity is to place the in­sured in the same place as he oc­cu­pied prior to oc­cur­rence. In­sured is pre­vented from mak­ing claim for full amount of loss un­der each pol­icy. In­sur­ance com­pany in­dem­ni­fies the in­sured only to the ex­tent of ac­tual loss suf­fered sub­ject to de­pre­ci­a­tion, pol­icy ex­cess, etc., and does not al­low for mak­ing profit out of a loss. One wants to cover his house­hold goods against bur­glary when he is away. Can he get a bur­glary in­sur­ance pol­icy? A bur­glary in­sur­ance pol­icy cov­ers goods against the risk of bur­glary. A bur­glary in­sur­ance pol­icy may also of­fer ex­ten­sion of cover against theft. A bur­glary in­sur­ance pol­icy will usu­ally cease to op­er­ate if the house is not oc­cu­pied be­yond a cer­tain de­fined pe­riod un­less you have in­ti­mated the in­sur­ance com­pany and they specif­i­cally agree to ex­tend the cover even when the house is not oc­cu­pied. It’s a good idea to en­sure that you have a bur­glary pol­icy al­ways, rather than opt­ing for one only when you are away. You might not get one if you want to in­sure the con­tents only when the house is locked. One needs to cover his jew­ellery. What pol­icy should he take? In­sur­ers of­fer ‘all risks’ poli­cies for cov­er­ing jew­ellery. You must en­sure that your jew­ellery is val­ued cor­rectly and you are able to show proof of val­u­a­tion should a claim oc­cur. An ‘all risks’ pol­icy also has ex­clu­sions, so go through the terms and con­di­tions thor­oughly.

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