Home insurance provides cover for financial losses to your house in the event of any calamity or accident. But incidents such as the recent demolition of four high-rise luxury apartments in Maradu, Kochi (which violated coastal regulation zone norms), following a Supreme Court order, will not be covered by a home insurance policy. Though many home owners claim they were unaware of the violations, the claims, if made, will not be processed, as the construction was illegal.

While ‘ignorant of law’ is inadmissible in a home insurance claim, here is list of exclusions that one should be aware of in a comprehensive home insurance policy.

Damage due to demolition

While any demolition of buildings due to illegal construction is not covered in a home policy, the damages arising out of such demolition to the neighbouring houses or buildings are covered by some of the insurers. For instance, if a government authority is bringing down a structure in a controlled manner but the demolition damages your wall or creates a crack in your house, then your home policy will cover the repair. Players such as ICICI Lombard, Bajaj Allianz General and Royal Sundaram General Insurance cover such damages.

Deepak Dhar, Head, Speciality Line and Marine Underwriting at Bajaj Allianz General Insurance, says: “It is very unlikely that a claim will be triggered for damages due to demolition of the adjacent building, as it will be a controlled demolition. But if there is such a claim, it will be subject to establishment of the fact that the damage has happened due to the demolition of the adjacent building.”

However, not all players provide for such consequential damages. For instance, Reliance General Insurance doesn’t cover accidental damages that occur due to the demolition of neighbouring buildings.

Rakesh Jain, ED & CEO, Reliance General Insurance, says: “Though Reliance General Insurance doesn’t cover accidental damages that occur due to the demolition of neighbouring buildings, the one who is demolishing the structure can go for liability cover, to cover for the legal expenses and pay for the compensation.”

Home insurance in general, when it comes to structures, provides cover against fire, lightening, accidental explosion or implosion, aircraft damage, flood, storm, cyclone, earthquake, riots and missile-testing operations. Damages due to terrorism are also offered but as an additional cover, by some insurers. For instance, Royal Sundaram’s Gruh Suraksha and HDFC Ergo’s Home Shield plans offer terrorism cover as optionally.

Exclusions to watch out

If you have purchased a home insurance policy, it normally excludes compound walls and landscaping, unless otherwise mentioned specifically. However, you can purchase it separately by paying an additional premium. For instance, for independent houses, Gruh Suraksha provides a separate sum insured for compound walls (in addition to the building sum insured). Similarly, under Bajaj Allianz General insurance’s home policy, if the compound walls are included in the sum insured at the time of availing the policy, it will be covered.

Home insurance policies do not cover damages or defects existing at the time of commencement of the policy and damage caused due to lack of maintenance of the property. Damage as a consequence of wear and tear, gradual depreciation or climatic conditions are also not covered. Any losses or damage caused due to war, invasion, act of foreign enemy hostilities and revolts are also not covered. Some insurers may not insure property beyond a certain age (say, 30-40 years). For instance, Royal Sundaram General’s Gruh Suraksha excludes buildings older than 30 years.

Similarly, your home insurance policies will not cover under-construction properties.

Content insurance

Content insurance, too, has exclusions, but it varies with each content and insurer. For instance, the Home Shield policy from HDFC Ergo does not cover loss or damages caused by electronic and electrical appliances and domestic appliances such as televisions and washing machines that are over 10 years old. Some of the other exclusions in a policy are loss or damage to livestock, motor vehicles, cash, bullion and deeds. It also does not cover any damage caused by wear and tear. Any losses due to theft after the occurrence of any peril or accident will not be covered. Also, no coverages will be given to money, securities, share certificates, bonds, documents or blue prints and credit/debit cards.

Further, insurers will not be liable to cover loss or damage to the contents of your house while being packed, loaded or unloaded, transported at an alternative accommodation.

Also remember, your home policy will not cover your building or contents/jewellery if you use your building for commercial purposes.

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