Nagesh meets his friend Karan to invite him for his housewarming ceremony. The conversation finds its way to home insurance and the inclusions or exclusions that go with it. 

Karan: Congrats, homeowner. What little tasks are pending before the big house opens? 

Nagesh: Well, the ‘hard’ parts are done. The ‘soft’ parts of registration, completion certificates and home insurance are pending. I was actually going through home insurance policy documents with a fine comb before this. I want to sift through inclusions and exclusions thoroughly. 

Karan: Inclusions and exclusions or risks that insurer is willing take and risks which are on the house, per se. Any startling nugget to share? 

Nagesh: Not a nugget but a flood. Having witnessed considerable monsoon flooding in the last five years, I am glad that flooding and all its variants are covered by insurance. One policy specifically mentioned overflowing water tanks in inclusions. I am counting that as floods under the man-made variety.

Karan: Man-made floods. Are you referring to the ‘fine specimens’ in Ukraine who blew up a dam and flooded the area. I am curious, how will insurers cover such an event?

Nagesh: Malicious damage is covered in home insurance and so is flooding. But the Ukraine situation seems to be a war strategy, however baffling it may be. Damage arising from acts of war is not covered in home insurance. The list of exclusions begins with acts of war and includes nuclear perils as well, if you are wondering. 

Karan: I think after a nuclear war, the insurance app will be the least of my priorities? But seriously, looks like most serious risks are covered in home insurance.  

Nagesh: Well, yes, and most are included in Bharat Griha Raksha — the standardised policy recommended by IRDAI. Fire, explosions and accidents are covered and so are man-made disasters; riots, strikes and malicious damage are covered. But wilful damage (by self and even others) is not covered along with negligence and natural wear and tear. Flooding, as I mentioned, is covered. The dry varieties: earthquakes, landslides, subsidence, are covered. One can also pitch for an optional terrorist cover if one is unsure.

The other aspects of burglary, dacoity, are covered as I have bought content insurance and declared the contents and their values. I am considering a separate insurance for my family jewels, though, given their large size which I don’t think can fit in my home insurance. The premium may be ₹4,000-₹5,000 per annum compared to Bharat Griha Raksha’s range of ₹2,000-₹5,000. 

Karan: Fair enough, Nagesh. With homes, a clear idea of risk transfer or ownership is useful information. 

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