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.
Insurance Schemes protect the 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.
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:
strike & malicious damage
cyclone, tempest, tornado, hurricane, flood & inundation
due to impact by vehicles
landslides and rockslides
from automatic Sprinkler installations
and/or overflowing of water tanks, apparatus and pipes
(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
Some insurers offer optional cover
Terrorism - any damage and loss to the structure and / or
contents of the home due to acts of terrorism.
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.
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.
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.
rate of construction is usually recommended by insurance
companies for the location, and takes into account the
material used in the home.
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.
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