Buy a cover for your house, no questions asked: Times of India

Mumbai: For the first time in the country , householders can buy an insurance cover for articles of their home without having to specify items in their house, provide proof of ownership or value each item individually in the policy . Country's largest insurer New India has introduced a home cover which for the price of extended warranty on an electronic device provides insurance for appliance breakdown, theft and damage of all household articles. The policy is in the nature of a “first loss“ cover where the claim is settled up to the sum insured but no pro-rata reductions are made for partial claims on account of under insurance.

“Across the world, it is a standard practice for households to buy three types of cov ers -health insurance, personal accident cover and an insurance for personal assets.In India, health insurance is catching up, while personal accident cover is being promoted through government schemes. We expect insurance for assets to pick up with the launch of new covers,“ said G Srinivasan, chairman, New India Assurance.

The launch of a “first loss“ policy without any documentation requirement represents a marked shift in the way insurers perceive policyholders. Until now anyone wanting to buy a policy had to provide proof of ownership, list out the entire inventory of household items and declare their exact value. In case one item was stolen and the value of the household goods was lower than what was declared, the insured would receive only pro-rata payments.

All these limitations have been done away with in the Griha Suvidha policy . A “first loss“ policy limits the insurance company's liability the sum insured. The advantage for policyholders is that even if heshe has household goods worth Rs 1 crore and has obtained a “first loss“ cover for Rs 1 lakh he will get the whole amount if goods worth Rs 1 lakh are stolen or damaged.Also the insurance company would settle the claim on good faith and not ask for original bills or proof of ownership.

The affordability of the cover can be gauged by comparing the price with that of extended warranty . While re tailers provide two-year extended warranties for appliances worth Rs 50,000 for a one-time payment of Rs 1,000, the Griha Suvidha for Rs 1,125 provides a Rs 1 lakh cover against burglary , housebreaking and theft; a Rs 50,000 cover for valuables and jewelry (including theft outside the house) in addition to a Rs 50,000 appliance breakdown cover. There is also a Rs 25,000 cover for desktop computer and television. “We have covered over one crore individuals under the Pradhan Mantri Suraksha Bima Yojana and we expect to sell at least 25 lakh householder policies in the first year,“ said Srinivasan.The policy would be distributed through banks' agents, online and through corporate agents including retail outlets.