Taking Cover. Saves cost, but offers little flexibility

If it’s not a package deal, then it’s not worth a dime! Millennials in particular seem to follow this maxim. Bundled offerings, be it in travel, mobile services, entertainment or even in insurance, have become the rage. Inspired by this ‘one-stop solution’ idea, HDFC ERGO has launched a new three-in-one insurance plan that covers your home (only contents), cyber risks and also throws in a personal accident cover. For those who already have the run-of-the-mill covers such as life, health and motor insurance, the three-in-one package is a convenient way to cover other important risks. But the plan comes with fixed covers and little options, that lowers your flexibility.

What’s on offer

HDFC ERGO’s three-in-one plan offers home insurance, cyber risk cover (e@Secure) and personal accident insurance, all under one plan.

Under home insurance, the product covers only contents and not the structure of the building. Damages due to fire, natural calamities, special perils such as explosion, strikes and riots, and burglary are covered under the policy.

Under the e@Secure insurance, legal costs for disputes arising out of certain cyber risks, unauthorised online transactions, damage to personal and e-reputation, identity theft, financial loss due to e-extortion and phishing/email spoofing, expenses incurred for psychological counselling as a result of cyber bullying — all are covered. At an additional premium, protection of digital assets from malware is also covered. There are, however, sub-limits capping the liability under different events. For instance, cost for legal protection and loss on unauthorised online transactions are covered at 100 per cent (of sum insured), but damage to e-reputation and identity theft is covered at 25 per cent. E-extortion, cyber bullying, psychological counselling and protection of digital assets from malware are covered at 10 per cent.

The third cover that HDFC ERGO offers under the product is the personal accident cover. Here, the product covers permanent disablement, hospital medical expenses, hospital cash (daily benefit) and mobility extension (in case of permanent total disablement).

What it costs

HDFC ERGO’splan offers four fixed plans. The key difference between the four plans is the cover available under home insurance. The cover for home contents in the first plan is fixed at ₹2.5 lakh. For the other three plans, it is ₹5 lakh, ₹7.5 lakh and ₹10 lakh. e@Secure cover is fixed uniformly at ₹50,000 across the four plans. Similarly under personal accident cover, permanent disablement, hospital medical expenses, hospital cash (daily benefit) and mobility extension are fixed at ₹10 lakh, ₹30,000, ₹5,000 and ₹50,000 respectively.

The premium works out to ₹2,745, ₹3,495, ₹4,245, and ₹4,995 per annum, respectively, for each of the plans (excluding malware cover). The malware cover costs an additional ₹134 across the plans.

Our take

The product is simple and convenient as it bundles three plans in one. But beyond that, it has several limitations that may make it unsuitable for someone looking for a comprehensive cover.

Under the home insurance cover, for instance, the plan only covers the contents. Even within the contents, it only covers those that are not portable — furniture and fixtures, electronics such as TV, washing machine, refrigerator. Jewellery and portable equipment such as laptops, watches and cameras are not covered. ICICI Lombard’s home insurance policy covers jewellery, too, within its overall cover for contents. A ₹10-lakh content cover costs ₹6,136 per annum as premium.

HDFC ERGO’s 3-in-1 plan also offers low flexibility on the cover amount. The maximum cover under the plan is ₹10 lakh for home contents.Under HDFC ERGO’s regular plan, the maximum cover is ₹25 lakh, while ICICI Lombard offers a maximum ₹30-lakh cover.

Similarly, in the case of cyber insurance, while the 3-in-1 plan offers a fixed cover of ₹50,000, under HDFC ERGO’s regular e@Secure policy, you can take a cover of up to ₹1 crore. Bajaj Allianz also offers cyber insurance cover of up to ₹1 crore.

In the case of personal accident cover, too, insurers such as ICICI Lombard offer up to ₹25-lakh cover for permanent disablement, while HDFC ERGO’s 3-in-1 offers a fixed ₹10-lakh cover.

Bottomline

If you are in your 20s and have just started a career, HDFC ERGO’s 3-in-1 plan may suit you, as it is convenient and cheap. But, if you own a house, have a family and are well into your 30s, you can give the bundled offering a miss.

It is always advisable to consider insurance plans that offer maximum cover and several options, even if they are costly.

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