NRI Home Insurance and Policies

Properties owned by non-resident Indians have grown in numbers
in the last decade, as investment in realty for investment and
personal use has risen sharply. NRIs wishing to secure their homes
or investments in India are eligible to avail of home insurance
schemes offered by insurance companies.

Home Insurance Schemes protect the structure and contents of
a home, and a proponent can choose between insurance for the building
or structure or its contents, or both.

Policy coverage
The policy covers the losses to the structure and contents of
a home due to any natural and man made calamities. Generally,
the risk covers:

• Fire
• Riot, strike & malicious damage
• Explosion & implosion
• Earthquake
• Lightning
• Storm, cyclone, tempest, tornado, hurricane,
  flood & inundation
• Damage due to impact by vehicles
• Missile testing operation
• Subsidence, landslides and rockslides
• Leakage from automatic Sprinkler installations
• Aircraft damage
• Bursting and/or overflowing of water
  tanks, apparatus and pipes

Burglary cover (only for contents):

The assets within the home are also covered against loss due to
theft or an attempted housebreak. It also covers loss of jewellery,
silver articles and precious stones kept under lock and key.

Optional covers:
Some insurers offer optional cover for:
Terrorism – any damage and loss to the structure and / or contents
of the home due to acts of terrorism.

Additional expenses of rent for alternative accommodation – If
the policy holder is forced to shift into an alternative accommodation
because the home is destroyed or damaged by any insured peril,
the policy will cover the additional rent incurred.

Sum insured
The home insurance policy insures the structure of the home for
its reconstruction value and not for market value. Reconstruction
value is defined as the cost incurred to reconstruct the home
if it is damaged. On the other hand market value is a combination
of cost of land, demand & supply scenario, etc.

Sum insured is calculated by multiplying the built up area of
the home with the construction rate per sq. feet, e.g. if the
built up area of a house is 1500 sq. feet and the construction
rate is Rs.1000 per sq. feet, the sum insured for the home structure
is Rs. 15,00,000.

The rate of construction is usually recommended by insurance companies
for the location, and takes into account the material used in
the home.

The contents of the home – furniture, durables, clothes, utensils,
jewelry, etc are valued on market value basis i.e. the current
market value of similar items after depreciation. Depreciation
does not apply for jewellery.

Insuring a home is imperative for an NRI, and a thorough study
of services and options available with a host of insurance companies
must be made before a decision is mad.