BURGLARY INSURANCE

 

BURGLARY INSURANCE AND FIRST LOSS POLICY EXPLAINED

 

Demystifying the coverage of burglary insurance

While insuring your assets is essential in today’s time, the question of adequate coverage often remains unanswered. This fact is substantiated by the annual report of the Insurance Regulatory and Development Authority of India (IRDAI) for the financial year 2014-2015, which reflects the low insurance penetration in our country and the claims incurred ratio for the general insurance sector.

The insurance gap in the country can only be filled by complete knowledge of coverage and disclosure of facts by the insured. Thus, understanding the minute details of your policy document becomes utterly crucial. And, when it comes to customised policies such burglary and special perils, observations reveal that policyholders often miss out on coverages or pay for a coverage they won’t need.

What is covered under a standard burglary policy?

A standard burglary policy can be classified into three types, namely, total loss, first loss and stock declaration policy. A total loss policy covers for the full value of the property insured, whereas a first loss policy allows a proposer to insure a certain percentage of stocks when the probability of the entire stock being stolen is less.

Thus, under a first loss policy, in case you anticipate that only a certain amount will be burgled, you can opt to insure only the maximum amount you wish to be protected for. Although, it ensures you pay lesser in premiums, the same may back fire in case the losses extend beyond your sum insured.

If your inventory keeps fluctuating the year round, you will need a stock declaration policy. Under this policy, the sum insured will be fixed at the maximum value of your inventory that you anticipate to hold at any point of time.

Such policies cover the loss or damage caused to the property only by forcible and violent entry into the premises as under the definition of ‘Burglary’. Damage caused by any other means is not covered and the compensation provided will be to the extent of the basic value of the property, subject to maximum limit.

What is excluded from a standard burglary policy?

The insurer will not be liable for the theft of luxury watches, jewellery, money, gold, precious stones, drawing artefacts, etc. unless these are specifically insured. The insurer will also be not liable for the loss if the damage is caused by insured or any member of insured's household or staff.

Besides, the policy ceases to exist if:

·         The property is left uninhabited for more than a week

·         The material is positioned at a relatively riskier place

·         The interest of the insured has passed on to another person through will or operation of law

How to make a claim?

In the event of a theft or burglary, you should immediately report the police and also notify the home insurance provider within a period of 14 days to submit your claims for the loss or damage sustained. Any claim notified beyond the stipulated period will be rejected by the insurance company.

You must also co-operate with the insurer in providing relevant information and evidence to process your claims faster. Lying or hiding facts while recording statement will delay your claim and might even result in rejection also.

 

HOME SECURITY DURING FESTIVAL SEASON

 

Protect your home this festive season

The National Crime Records Bureau (NCRB) 2014 report reveals that there were 38,071 cases of robbery in the country. According to media reports, 20% of all cognisable cases registered with the police are related to property offences – threat, housebreaking or robbery. A large number of cases also go unreported.

With advancement in technology and widespread use of social media, robbers are also leveraging it to their advantage. Now, homes are often targeted based on social media posts declaring that the owners are out on holiday, rather than merely by looking at locked doors! The upcoming festive season enhances the susceptibility of homes to such threats, with long vacations and the bustle of celebrations just around the corner.

As you get busy with preparing for the festivities or that long-awaited family holiday, ensure your home is secure with the following tips:

·         Employ a Watchman

A trustworthy watchman can ensure the safety of your premises. The diligence of your watchman will prevent any kind of trespassing, thus minimising the risk of your house being robbed.

·         Install CCTVs

Technology is a boon; leverage it to your advantage. CCTVs can reduce the crime susceptibility of your neighbourhood. For instance, according to Delhi Police reports, criminal incidents reduced by 50% in Chandni Chowk area after installation of CCTVs.

·         Get Alerts

You could get live alerts of the CCTV footage on your personal device, such as smartphone, which you carry on your person. Additionally, susceptible entry points can also be secured with electronic locks that are connected to your smartphone and alert you in case of unauthorised access or attempted break-in.

·         Lock it up

Ensure all the doors and windows are properly locked, especially at night and when you leave the house. Don't hide the duplicate or master keys in obvious places. Also, any valuables such as jewellery that you may bring home for the festive season should be kept under lock and key.

·         Avoid Flaunting

Do not make expensive buys apparent; gifts and other valuables that you buy should be placed in unobtrusive boxes and bags to avoid unnecessary attention from strangers. Moreover, do not make your holiday a public discussion by posting it on social media platforms and leaving an open invite to intruders.

·         Opt for Comprehensive Home Insurance

A comprehensive home insurance that safeguards the structure and contents of your home can cushion your finances in case of any untoward incidents such as burglary, theft, break-in, etc. The policy also covers any calamities that may occur, such as riots, terrorist attacks, etc. while you are away.

Security tools such as those mentioned above will protect your home while also substantiating your insurance claim in case of losses. Some insurance providers also offer reduction in premium in case policyholders have taken proactive additional measures to protect their property.

 

TIPS TO EVALUATE YOUR VALUABLES FOR HOME INSURANCE

 

A guide to covering valuables under home insurance

India suffered economic damages over worth 3 billion, and was among the top three most disaster-hit countries in 2015, according to the United Nations Office for Disaster Risk Reduction. And these numbers are only from natural disasters. Considering this, the susceptibility of our homes to natural and manmade disasters, thefts and acts of terrorism is high.

In the event of such untoward incidents, In addition to the impact on the structure, the contents of your home will also be damaged. Destruction of valuables such as jewellery, fine art, and other valuables can be a devastating blow to your investments. Taking home insurance with a content cover can save you from significant losses.

What Is A 'Valuable' In Home Insurance?

As per insurance policies, valuables generally include jewellery, gold items, silver and precious metals and expensive gadgets like cameras, appliances, watches, etc. Other items included are art collections and precious stamps, coins and medals.

Coverage for Jewellery and Other Valuables

The home contents insurance covers you against loss due to burglary or theft. It covers up to 25% of the total content sum insured or ₹1 lakh, whichever is lower.

Every insurer has their maximum limit of coverage for a particular claim. Wilful damage and damage due to repairs are generally excluded from cover. Moreover, you can file a claim only if the valuables have been listed as contents of your home. If your valuables have been damaged because of factors included in the policy schedule, you can claim the appropriate value for it.

For certain items, the insurance policy will also contain a ‘single article limit’ on the amount your insurer will pay. The items and amount vary from company to company.

Getting the Right Valuation

Jewellery and other valuables are assessed at the market value of the item. The claim provided would be the cost of buying a similar item, minus the depreciation.

In case of gold jewellery, the market value is based on gold weight, and excludes making and incidental charges. It is to be noted that the insurer is only liable to the extent of sum assured and no more.

A Valuation Certificate is generally mandated by insurers in case of jewellery and ornaments with individual value of a certain amount. In case of pairs or sets of valuables, the claim cannot exceed the value of any particular part or parts that may be lost or damaged.

Things to Consider While Insuring Valuables with Your Home Cover

·         For items such as fine art, collectibles and antiques always insure at full cost of replacement. You can seek professional help to arrive at the valuation, as the rates change over time.

·         Specify to your insurer the items you consider valuable; not doing so will exclude it from your policy coverage.

·         Keep in mind that you will be liable to pay any excess to the policy; in case of jewellery, these can be higher than replacement costs.

·         Get a valuation certificate for all your valuables with worth more than 2-3 lakhs.

·         Expensive gadgets like laptops, musical instruments, and portable devices can also be insured under valuables.

·         Confirm with your insurer the various claim limits for different items you want covered.

What to Ask Your Insurer

There are certain questions you need to clarify before purchasing your policy. One way to seek clarity is to study the policy wordings and clarify all doubts with your insurer before purchasing. The following questions are crucial:

·         What is the proof of damage required, and in which cases are they applicable?

·         How is the article valued if it is custom made?

·         Does the coverage limit fluctuate with items?

·         How are the claims handled?