A guide to covering valuables under home insurance
India suffered economic damages over worth 3 billion, and was among the top three most disaster-hit countries in 2015, according to the United Nations Office for Disaster Risk Reduction. And these numbers are only from natural disasters. Considering this, the susceptibility of our homes to natural and manmade disasters, thefts and acts of terrorism is high.
In the event of such untoward incidents, In addition to the impact on the structure, the contents of your home will also be damaged. Destruction of valuables such as jewellery, fine art, and other valuables can be a devastating blow to your investments. Taking home insurance with a content cover can save you from significant losses.
What Is A 'Valuable' In Home Insurance?
As per insurance policies, valuables generally include jewellery, gold items, silver and precious metals and expensive gadgets like cameras, appliances, watches, etc. Other items included are art collections and precious stamps, coins and medals.
Coverage for Jewellery and Other Valuables
The home contents insurance covers you against loss due to burglary or theft. It covers up to 25% of the total content sum insured or ₹1 lakh, whichever is lower.
Every insurer has their maximum limit of coverage for a particular claim. Wilful damage and damage due to repairs are generally excluded from cover. Moreover, you can file a claim only if the valuables have been listed as contents of your home. If your valuables have been damaged because of factors included in the policy schedule, you can claim the appropriate value for it.
For certain items, the insurance policy will also contain a ‘single article limit’ on the amount your insurer will pay. The items and amount vary from company to company.
Getting the Right Valuation
Jewellery and other valuables are assessed at the market value of the item. The claim provided would be the cost of buying a similar item, minus the depreciation.
In case of gold jewellery, the market value is based on gold weight, and excludes making and incidental charges. It is to be noted that the insurer is only liable to the extent of sum assured and no more.
A Valuation Certificate is generally mandated by insurers in case of jewellery and ornaments with individual value of a certain amount. In case of pairs or sets of valuables, the claim cannot exceed the value of any particular part or parts that may be lost or damaged.
Things to Consider While Insuring Valuables with Your Home Cover
- For items such as fine art, collectibles and antiques always insure at full cost of replacement. You can seek professional help to arrive at the valuation, as the rates change over time.
- Specify to your insurer the items you consider valuable; not doing so will exclude it from your policy coverage.
- Keep in mind that you will be liable to pay any excess to the policy; in case of jewellery, these can be higher than replacement costs.
- Get a valuation certificate for all your valuables with worth more than 2-3 lakhs.
- Expensive gadgets like laptops, musical instruments, and portable devices can also be insured under valuables.
- Confirm with your insurer the various claim limits for different items you want covered.
What to Ask Your Insurer
There are certain questions you need to clarify before purchasing your policy. One way to seek clarity is to study the policy wordings and clarify all doubts with your insurer before purchasing. The following questions are crucial:
- What is the proof of damage required, and in which cases are they applicable?
- How is the article valued if it is custom made?
- Does the coverage limit fluctuate with items?
- How are the claims handled?