Q&A: It’s difficult to take cashless cover from two insurers for same claim

Published in Mint on 30th April 2018. Written by Abhishek Bondia

Is it possible to get cashless coverage from two insurers simultaneously?

Ravi B.

When the sum insured gets used up in one insurance policy, you can claim the balance amount from the second insurer. The second insurer will insist on the final claim settlement details from the first insurer. This is done to ensure that the aggregate amount reimbursed to you is not more than the actual expenditure incurred. The final settlement details are available only after discharge. So, it becomes difficult to take cashless claim simultaneously from two insurers. The accepted practice is to take cashless coverage from the insurer with a higher coverage and then claim the balance amount as reimbursement from the second insurer.

I have an apartment on the 11th floor of a building in Noida. I am planning to buy home insurance. What features should I look for? How much will a home insurance cost on an average for a 3-bedroom apartment? Also, will an insurer pay if my floor gets completely wiped out due to an earthquake or any other natural calamity, as the apartment is not on any land per se?

—Supriya

There are broadly two kinds of home insurance covers. The more prevalent type is the standard fire and special perils insurance for the construction cost of the house. This policy would insure the cost of reconstructing the damaged portion. Loss could be either partial or total. If you opt for this option, you should ask for earthquake cover as an add-on and insist on reinstatement value clause. In the particular situation you described, when the building is reconstructed, the policy would indemnify you for your pro-rata portion of the cost. For a 1,500-sq.ft home, assuming cost of reconstruction is Rs4,000 per sq.ft, the sum insured will be Rs60 lakh. Cost of such insurance would be around Rs3,000.

Another option is an all-risk policy for flats on agreed-value basis. Only a few insurers offer this product. Here, you could take the registered value of the house as sum insured. In case of total loss, you can surrender the house to the insurer. They will indemnify you with the full sum insured. Since the house is at registered value, it includes the cost of land as well. For a 1,500-sq. ft house, assuming the current property rate is Rs10,000 per sq. ft, the sum insured will be Rs1.5 crore. Cost of such insurance would be around Rs7,000. I recommend the second one, as it frees you from dependence on reconstruction in case of total loss.

We are planning the wedding of our daughter in Goa in August, and rainfall is a likelihood. Can we buy insurance for such an eventuality?

K.R. Patil

Wedding insurance is available. Such policies cover wedding cancellation, damage to property at the wedding venue, personal accident for specific individuals, and third-party injury and property damage. Cancellation of the wedding due to fire, flood, storm, burglary and earthquake is also covered. Specifically, water-related damages due to storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation are covered.

In case of cancellation, expenses linked to printing of cards, advances for venue, caterer, decorations, and stay and travel will be reimbursed, subject to the policy sum assured. The policy would also cover wedding cancellations due to death, accidental disability and hospitalisation of specific individuals.

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