Published in Mint on 5 May, 2015, Written by Abhishek Bondia
If I take a two-month travel insurance, can I get it extended later on?
—Sumit Chandra
You can extend travel insurance in the middle of a trip. Generally, insurers would limit the maximum duration of a single trip to six months. So, you can extend it for that much time. In case you make a claim during the original period, insurers might refuse to extend the insurance further. Ideally, while buying the policy, plan a buffer for possible extensions.
While taking home insurance, how does one assess the value of the structure and its contents?
—Rukhsana
There are two main ways to determine sum assured—reinstatement value or depreciated value. Under reinstatement value, the current cost of reconstructing the house is insured. On total loss, the cost of reconstructing the house to its prior state is paid. In case of depreciated value, initial construction cost less depreciation for the age of the building is insured. It is generally good practice to insure a home on reinstatement value basis.
Contents are assessed depending on the type of assets. Works of art, paintings and jewellery are valued based on an independent surveyor’s report. All other contents are insured on reinstatement value, i.e., the present cost of buying a similar asset of same capacity. Most insurers will not cover electronic items, such as laptops, that are more than five years old. If the value of the home contents is high, then insurers may also use agreed value basis wherein the insurer and insured agree upon the fair value of each item when placing the insurance. If that item is stolen or destroyed, then the agreed value is paid.
What and who are covered in a personal accident policy?
—Trisha Batra
A personal accident insurance policy typically provides five benefits—accidental death, permanent total disability, permanent partial disability, temporary total disability and accidental medical expenses. The accidental medical expenses usually get triggered only when one of the first four benefits are payable. Most personal accident policies provide 24 hours worldwide cover.
Personal accident cover can be taken for anyone. Generally, employers provide it for their employees. The maximum sum assured in a personal accident policy is typically 10-15 times the person’s annual income.
I have a home in the mountains. Can that be insured for earthquake damage?
—Manreet
Yes. In fact, it is important to purchase insurance for earthquake as it can cause severe damage. The rates depend on the location of your home. If it is in a seismically active area, then rates will be high. Property insurance sometimes excludes earthquake cover, so do make sure that this is part of the covered perils.
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