The Insurance Regulatory and Development Authority of India (IRDAI) has announced introducing a new standard home insurance policy which will cover the risk of fire and allied perils for certain risks.
The new guidelines issued by IRDAI states that the Standard Fire and Special Perils (SFSP) policy provided for in the erstwhile All India Fire Tariff (AIFT) 2001 will be replaced by the following product:
Bharat Griha Raksha (for home building and home contents)
Bharat Sookshma Udyam Suraksha (for enterprises where the total value at risk is up to Rs 5 Crore)
Bharat Laghu Udyam Suraksha (for enterprises where the total value at risk is more than Rs 5 Crore and up to Rs 50 crore)
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IRDAI has asked all general insurers carrying on fire and allied perils insurance business to offer the plans from 1 April 2021.
The initiative comes after India was ravaged by a number of natural calamities in the recent year.
Bharat Griha Raksha
The standard home insurance policy would offer "cover against a wide range of perils, namely fire, natural catastrophes (storm, cyclone, typhoon, tempest, hurricane, tornado, tsunami, flood, inundation, earthquake, subsidence, landslide, rockslide), forest, jungle and bush fires, impact damage of any kind, riot, strike, malicious damages, acts of terrorism, bursting and overflowing of water tanks, apparatus, and pipes, leakage from automatic sprinkler installations and theft," IRDAi said.
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The policy will provide cover within seven days from the occurrence of any of the aforesaid events.
It will provide cover for general home contents automatically (without any need for a declaration of details) for 20 per cent of the sum insured for the building subject to a maximum of Rs 10 lakh. One can also opt for a higher sum insured for general contents by declaring the details.
There would also be two option covers on offer including insurance for valuable contents' like jewellery and personal accident of the insured and spouse due to an insured peril under the policy.
Bharat Griha Raksha will also provide a complete waiver of underinsurance. If the sum insured declared by a policyholder is less than what ought to have been declared for the property in question, the policyholder’s claim will not be settled proportionately but up to the sum insured that is declared.
IRDAI added that Bharat Sooksma Udyam Suraksha and Bharat Laghu Udyam Suraksha would be useful for MSMEs' financial protection.
