Important Terms to Know About Home Insurance Policy

Limit of Liability: Irrespective of the original value of the insured property at risk at the time of damage, the maximum liability amount offered by Home Insurance Policy for any damage during the policy period will be limited in aggregate to the specified sum insured in the schedule.

Basis of claim settlement: The Company will pay for the restoration of damaged equipment to its previous serviceable condition or reimburse the market value of the same, given the cost of repair is similar to or beyond its market value, immediately before the damage (total loss basis). Based on the extent of their inclusion in the sum insured, we will also pay for expenses related to –

• Cost of dismantling and re-erection for the purpose of repairs.

• Customs duties and other dues.

• Ordinary freight to and from the repair shop.

Repair Basis: While settling claims following repair basis settlement, the following aspects will be taken into consideration –

• The cost of any provisional repair will be borne by us if such repairs constitute part of the final repairs and do not increase the total repair expense.

• No deduction will be made for depreciation in respect of parts replaced except those with limited life.

• If the repairs are performed at a workshop owned by you, we will pay the cost of materials and wages incurred for the purpose of repairs plus a reasonable percentage to cover overhead charges.

• Value of salvage must be taken into account for both repair basis and total loss basis, in case of replacement of parts or items.

• We will make payments only after being satisfied with the necessary bills and documents that the repairs have been affected or replacement has taken place as the case may be.

Total Loss Basis: While settling claims following Total Loss Basis settlement, the following aspects will be taken into consideration –

• The market value of the item to be calculated by deducting proper depreciation from the ‘replacement value’ of the item as new of the same kind, type and capacity and the claim will be settled on the ‘market value’ basis.

• If the insured items subject to total loss become outdated, then all costs required to replace the damaged item with a follow-up model (similar type) of similar structure and configuration (of similar quality) i.e. low, average or high capacity will be reimbursed.

• We may not insist on bills and documents in case you are unable to replace the damaged equipment for any reason.

Special conditions you must note

The Insurance Company’s obligation with relation to any item sustaining damage, under this section of the policy shall terminate, given the item concerned is kept in operation, sans repair to our satisfaction or temporary repair without our consent, even after a claim is made.