The right choice
Choosing a suitable insurance plan can be an arduous task. To make it easy, start by listing your valuable possessions and evaluate what it will cost you to replace them. If you can afford the replacement on your own, you can ignore insurance, but were you to find the cost of replacement expensive, you would be better off with an insurance policy. For instance, for a small sum, you could have your high-end Smartphone insured than rue over paying a tidy sum to get it repaired or purchase a new one.
Although insuring your vehicle is a must to ply it on roads as mandated by the Motor Vehicle Act, you also need to insure it for damages due to accidents. "There are additional features in the motor insurance policy which provides for on the spot repair, towing services and zero depreciation, which could come in handy," explains Rajiv Kumar, MD and CEO, Universal Sompo General Insurance. Of course it costs to take these additional covers, but they are worth every rupee when one experiences a claim.
Some covers like engine protection come in handy in case of monsoons or floods and the Return to Invoice (RTI) is an add-on option which covers the gap between the insured declared value and the invoice value of the car. It's an option that will fetch you the entire amount of loss (the on-road price you paid for your car) that you incurred. Typically, an RTI costs around 10 per cent more than the normal policy but considering that a submerged car in rains is a huge loss, this cover acts like the accident safety bag for your finances.
The importance of home insurance crops up every time there is a natural calamity like floods or earthquakes. People who lose their houses and valuables are left to pick up pieces and prepare for the long road to rebuilding. "Majority of households are uninsured against these risks. The lack of insured homes is reflected every time there is a natural calamity in the country," rues G. Srinivasan, CMD, New India Assurance. People spend their savings and even borrow for their dream house, but tend to miss out on securing it with insurance.
Typically, a householder's insurance covers both the structure and contents inside the house. The structure is insured for damage and the contents of the house are covered for damage due to fire and other perils, besides theft. Some policies necessitate listing of all items in the house to be insured, while others are much simpler, having done away with the need to declare each item if the total value is over a particular threshold, say, Rs 5 lakh, making it easier for individuals to calculate the sum insured.
"Normally for a home valued at Rs 50lakh and contents worth Rs 5lakh, the premium would come to Rs 7,000 per year," says Sasikumar Adidamu, CTO, Bajaj Allianz General Insurance. Like any insurance, a home insurance plan also comes with exclusions like misrepresentation, suppression of key information and pre-existing damage to buildings. In case of contents, your policy may not cover loss of money, securities, stamps, bullion, and antiques unless independently insured. Damage to documents like bonds, shares and stock certificates are also excluded.
An international holiday is meant to be rejuvenating, but one does occasionally come across tales of unpleasant experiences. Imagine a scenario where you land up losing your baggage or passport? Interconnecting flights are prone to cancellations. Most importantly, what if you were to fall sick when traveling? The odds that you would have factored in all these exigencies are very remote. The power of travel insurance is felt only on such instances.
There are policies to address every type of traveler's needs-short stay, long stay and even for frequent travelers. The short stay is for a typical vacation taker, while long stay could be for students pursuing courses abroad. The frequent traveler is a business traveler who travels abroad regularly and would rather have a policy taken once to address the travel schedule than take multiple policies.