Know the Key exclusion of home and vehicle insurance cover

New Delhi: What clicks in the mind when we talk about Insurance, Insurance is an arrangement with a company in which you pay them regular amounts of money and they agree to pay the costs if, for example, you die or are ill, or if you lose or damage something. So what defines the other types of insurance? or we tell you the exclusions covers by home and vehicle insurance. These are the two major insurance which normally people acquire in today's world.

Home insurance

The most common risks included in a home insurance policy are fire, damage caused by weather like flood, earthquake, or cyclone as well as theft and burglary.

“Evaluate all the risks your house is prone to or might face in the future. Look out for all the probabilities and then decide the house’s coverage after calculating all the factors," said Subramanyam Brahmajosyula, head, underwriting, and reinsurance, SBI General Insurance Co. Ltd.

Consider the exclusions. The most common exclusions in home insurance products are debris removal and the consequential or indirect loss caused to the property.

If you have an independent house, choose a cover that will pay for the entire cost of reconstruction. Evaluate the options available to arrive at a suitable sum insured. For an apartment or a flat, the sum insured can be decided on an agreed value basis, meaning the loss will be settled on a fixed value agreed with the insurer earlier.

“Add-on insurance can be taken to cover riot, strike, and malicious damage, loss of rent as well as a breakdown of appliances," said Shreeraj Deshpande, chief operating officer, Future Generali India Insurance Co. Ltd. Some policies also include accidental hospitalization—with daily cash allowance—and a pet cover.

According to experts, it is better to buy a householder’s package policy, as it offers comprehensive coverage. Keep in mind that add-ons may increase the premium that you have to pay.

“Also, check for options to purchase a long-term cover for three or five years where you may get a discount in premiums," said Brahmajosyula.

Motor Insurance

In motor insurance, a third party (TP) cover is mandatory for vehicles plying on roads, which protects the owner of the vehicle from legal liability arising due to an accident—it may be injury or death of the third party or third-party property damage. Moreover, individuals have to mandatorily buy a cover which pays ?15 lakh if the owner of the car dies in an accident.

TP cover, however, does not offer protection against damages caused by natural calamities. An own damage cover, which is optional for car owners, pays for expenses of repairs when a vehicle gets damaged due to natural calamities or accidents, and pays the full insured declared value (IDV), which is the value the insurer will pay if your vehicle is totally damaged or stolen.

“Vehicle IDV is pre-defined by the regulator on a yearly depreciation basis. However, policyholders can increase it up to 20% and decrease it by 10%, depending upon the vehicle’s current ex-showroom price. Mind that increasing IDV can raise the premium as well," said Chatterjee.

A key exclusion in a motor insurance policy is a compulsory deductible component, which is a part of the claim that an insured has to pay out of his or her pocket. The company may also deduct the depreciation amount on the parts replaced. Other exclusions that are not covered are mechanical damages to the engine and all other parts and damages due to wear and tear.

Depreciation reimbursement, engine protection, and roadside assistance as some of the add-ons you can opt for.

Research properly before buying a home or vehicle insurance policy.