Synopsis: This article breaks down some unknown facts on home insurance, which includes what’s typically covered and what isn’t, and highlights some of the home insurance providers based on your needs.
The Causation Trap Explained
Insurers, as a rule, can deny claims based on the argument that “faulty workmanship” was the reason for the loss, even if a covered peril like fire occurred, unless the policyholder can demonstrate that the peril was the primary cause. This places a burden on the policyholder during surveys, and non-disclosure of unapproved work nullifies everything.
For instance, after an apartment in Mumbai was bought, its owner found out that an unpermitted balcony extension had come along with the purchase. The balcony, which was already in a bad state of construction, let rainwater in during a storm, causing massive damage worth ₹5 lakhs to the interior walls and electronic devices. A claim was then made under HDFC ERGO’s Bharat Griha Raksha policy.
On the other hand, the insurer turned down the claim upon the surveyor’s marking of the balcony as an illegal extension with poor design and insufficient waterproofing. The insurer denied the claim, stating that the loss was due to factors that were not covered under the policy, and thus, the company was left with no compensation.
What’s Covered in Home Insurance Policies
A typical homeowner’s insurance policy is designed to offer protection against a wide range of risks such as fire, natural disasters, and even man made destruction:
- Fire and Explosion: Compensation for losses from fire, electric or gas explosions, and sometimes even implosions.
- Natural catastrophes: Covering all sorts of nature’s fury, that is, earthquakes, floods, cyclones, storms, hurricanes, typhoons, lightning strikes, etc.
- Human-induced Risks: Coverage for damage caused by riots, vandalism, strikes, and even terrorism.
- Theft and Burglary: Coverage for the personal belongings that were stolen and also the damage done to them, with the claims having a time limit of 7 days from the occurrence of the insured event.
- External Impact Damage: Coverage if your property is damaged by an external object, i.e., a car or a tree that is falling tree.
- Contents and Personal Belongings: Protection for all the furniture, electronics, appliances, and other household items that are inside the house.
- Public Liability Coverage: Compensation if the guest or a third party damages the property that is insured.
- Valuable Items Add-ons: Optional protection for items such as jewelry, silverware, paintings, and art at a very small additional charge.
Also read: 5 Travel Insurance Plans Every Senior Citizen Must Know Before Going Abroad; Here’s the List
What’s Not Covered in Home Insurance Plans
Homeowners should take note of the particular exclusions in home insurance policies that they cannot claim for:
- Wear and Tear: Deterioration of materials from normal use and age is not included in the coverage, and damages of this type that do not affect the overall functionality are also excluded.
- Pre-existing Damage: Damage that was present before the policy came into effect is not covered.
- Unoccupied Properties: If your house is unoccupied for a period of 45 days or more, then claims for losses due to burglary or theft will generally not be considered.
- Earthquakes and Earth Movements without additional coverage: The general rule is to keep the damages from earthquakes, subsidence, landslides, and rockslides out of the policy unless there is a special add-on coverage for them.
- Faulty Construction and Defective Materials: Damage resulting specifically from poor workmanship, substandard materials, or non-compliance in the construction process is not covered.
- Kutcha Construction: Properties constructed with temporary mud or thatch (kutcha) are not qualified for standard home insurance.
- War, Terrorism, and Nuclear Hazards: Whole standard policies exclude damages caused by nuclear radiation, civil unrest, wars, or terrorism (although some policies do offer terrorism coverage as an add-on).
- Demolition by Authorities: It is a sad situation, but no insurance will cover losses resulting from the government ordering the demolition of illegal structures.
| Insurance Company | Key Strengths | Best for |
| HDFC ERGO | Comprehensive coverage, up to ₹10 crore building cover, flexible tenures up to 30 years | Complete protection with fixed premiums |
| ICICI Lombard | Digital claim process, 24/7 support, strong claim ratio | Quick settlements and customer service |
| Tata AIG | All-risk policies, no-claim discounts | Metro city homeowners |
| Bajaj Allianz | Affordable premiums from ₹18/month, instant policy issuance | Budget-conscious homeowners |
| SBI General | Earthquake and flood included in base plan, multi-tenure options | Government employees and rural areas |
| Reliance General | Tech-enabled homes coverage | Smart home protection |
| Raheja QBE | Architect fees, debris costs, and structural damage coverage | High-value and luxury properties |
| Universal Sompo | High-value item protection, pan-India coverage | Large properties |
Conclusion
Home insurance does not cover any illegal or unapproved buildings and structures resulting from bad workmanship, non-conformity, and government-initiated demolitions. Major insurers like HDFC ERGO, ICICI Lombard, and Bajaj Allianz provide extensive coverage for major risks like fire, flooding, and theft, but always report property changes. Get licenses, understand exclusions, and keep records to prevent claims being rejected and to have full policy coverage all the time.
Written by Yatheedra N
