Home Insurance for NRIs : Policy, Schemes and Coverage for Non Resident Indians

Properties owned by non-resident Indians have grown in numbers in the last decade, as investment in realty for investment and personal use has risen sharply. NRIs wishing to secure their homes or investments in India are eligible to avail of home insurance schemes offered by insurance companies.

Home Insurance Schemes protect the structure and contents of a home, and a proponent can choose between insurance for the building or structure or its contents, or both.

Home insurance schemes offer protection to the structure and contents inside the house. You can choose to insure both or either.

Coverage

The policy covers the losses to the structure and contents of a home due to any natural and man made calamities. Generally, the risk covers:

• Fire
• Riot, strike & malicious damage
• Explosion & implosion
• Earthquake
• Lightning
• Storm, cyclone, tempest, tornado, hurricane, flood & inundation
• Damage due to impact by vehicles
• Missile testing operation
• Subsidence, landslides and rockslides
• Leakage from automatic Sprinkler installations
• Aircraft damage
• Bursting and/or overflowing of water tanks, apparatus and pipes

Burglary cover (only for contents):

The assets within the home are also covered against loss due to theft or an attempted housebreak. It also covers loss of jewellery, silver articles and precious stones kept under lock and key.

Premium You can choose to remit funds from abroad through either regular banking channels, cash, money orders or debit your NRE/FCNR account in India. The option to pay online is also available to you. In case you are working from abroad for an Indian employer, he can also make payments on your behalf.

Sum assured The insurance company will insure your home as per its reconstruction value, and not its market worth. The firm will evaluate the value of the house depending on the cost of the material used. It will calculate the cost by multiplying the built-up area with the construction rate per square feet. The house’s content will be valued as per the market rate and subject to depreciation, except in the case of jewellery.

Claim due The claim payment is generally made to you in rupees. For payments in a foreign currency, exceptions are made only if you have paid the entire premium in the foreign currency and you are a permanent resident abroad. However, this is subject to RBI approval.

The rate of construction is usually recommended by insurance companies for the location, and takes into account the material used in the home.

The contents of the home - furniture, durables, clothes, utensils, jewelry, etc are valued on market value basis i.e. the current market value of similar items after depreciation. Depreciation does not apply for jewellery.

Insuring a home is imperative for an NRI, and a thorough study of services and options available with a host of insurance companies must be made before a decision is mad.

In today’s market, there are a host of insurers with attractive home insurance plans available to you. However, before settling on one, carry out some groundwork about the company. Your choice should be based on a number of factors such as premium you pay, coverage, claim settlement ratio of the company as well its reputation. You should also carefully read the terms and conditions of the policy thoroughly to determine how comprehensive your scheme is and under what circumstances damages to your home may not be covered under the policy.

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