Vivek Kaur had a fire break-out last year wherein not only his house but many neighboring properties were also damaged. Home insurance, during such circumstances, comes handy. Luckily, Kaur had also bought a home insurance cover as a backup in case things went wrong, which helped him cover for all the damages. Most home insurance policies cover various risks ranging from fire, explosion, storm, cyclone, riots, impact damages and other malicious damages. However, they come with their own set of limitations. Hence, experts suggest one should understand a policy first to know what it actually provides because it always might not be as broadening as one might think.

For instance, in the case of a fire break out in the house, you need to inform about the same to the insurance company to file a claim as soon as possible. The policyholder needs to get in touch with the company and explain the situation. If it is possible for the insured, it could be helpful if they could take pictures of damaged parts of the property, for a smoother claim process. You might also need to give additional documents, depending on the accident, which you need to provide along with the claim form. For instance, declaration of the construction value of the house along with the content, you have within, while opting for a policy. The insurer appoints a surveyor to assess the damage, depending upon the extent of the incident and the type of damage done, and after validation of the claim, the insurance company offers reimbursement for the same.

Also, if your neighbors or any third-party gets harmed, due to fire break down in your house, the insurance company covering your house will also pay for such incidents. The liability cover includes that any bodily injury or damage caused to any third person on your premises or by you is liable to get cover, which also includes damages done to third-party property. Home insurance policies take care of any legal liabilities in case of any damage caused to any third person or property, on the insured premises or by them. However, few home insurance policies provide the third-party cover only as an add-on cover. Hence, check your policy details properly while buying a policy.

Such policies require a public liability add-on cover, to cover for third party injury or property. You can also opt for other add-on covers such as ATM withdrawal robbery cover, loss of wallet and key cover, temporary resettlement cover which includes coverage for alternative accommodation and transport, and employee’s compensation cover which includes injured drivers, cook or guard. Experts suggest neighbors can sue the owner of the home from where the fire has emanated, hence public liability cover under a home insurance policy is a must which pays for the damages done to neighboring houses.

Factors like the type of construction, protection systems available and claim history help in deciding the premium rates for a home insurance policy. For instance, the annual premium for sum insured of Rs 50 lakhs for the structure of a house and Rs 10 lakhs for the content of the house ranges between Rs 3,000 and Rs 5,000. The extent of compensation, however, depends on whether the house is adequately insured with the right sum insured or not. No adjustment is made if the building is adequately insured, but if not, then the proportionate adjustment is made in the claim amount.