Saturday, October 1, 2011

To insure or not to insure (your home)

One of the after effects of the 18Sep2011 earthquake in our area will be that the insurance companies will be thronged by people who will want to insure their homes or buildings against earthquakes and maybe landslides. This is a good thing and I strongly advise insurance of homes and assets.
However, a word of caution - insurance companies can be tricky people and not all of us have the time or patience to read the small print in the "terms and conditions", so more often we end up signing on the dotted line and leaving the rest to the insurance agent.
Having had personal experience of this earlier, here are some words of advice :-

  • If possible visit the insurance company office, talk with the Branch Manager and ask him to send an agent who is responsible and a good service provider.
  • When the agent arrives, confirm that the insurance policy covers landslide and earthquake damage. (A reputed insurance company representative told me last week that they may stop insurance against these hazards in this area since we are in a high risk zone and they would lose large sums of money if they continued the insurance)
  • Confirm that the retaining walls of the house/building will also be covered by the insurance.
  • Check the depreciation that will be levied on your building/structure and be sure that old buildings will be valued at considerably less than what you might think!
  • While filling up the insurance papers, be specific and list each building/structure separately – with dimensions.
  • Some companies require details of contents of the building/home to be listed out before insuring –provide this information if necessary.
  •        Ask the insurance agent  about the procedure to be followed in case of claim :-
o                   An FIR is to be made at the police station immediately after damage.
o                   Land ownership documents and site plan will be required.
o                   Approved building plan also will be required.
  •  When your building is damaged, intimate damage on telephone and writing immediately to the agent and Insurance Company office. DO NOT START REPAIRS.
  • Photograph all damages and cracks with a camera which has a date stamp.
  • On getting your intimation, the company will send a representative to assess the damage. Discuss the claim procedure with him and commence repairs only after getting his clearance. Go thru the claim form that he hands over to you and clarify any doubts. You will require an engineer to be available to prepare an estimate of the costs.

    Comment by Praful Rao
    Would appreciate any comment on the above since financial wizardry is not exactly my forte...

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