Hyderabad: Less than 10 per cent of families in the state have household insurance and a lack of awareness is being seen as the main reason for this urban deficiency.
Household insurance usually covers house, domestic appliances, jewellery and electronic equipment from burglaries and fire. Experts say that in addition to lack of awareness, people feel that it is a tiresome process as it is valid only for a year. The trend is the same among high-income groups.
Insurance officials say household insurance is helpful only in the event of a damage or theft or loss due to fire, and insurers can claim losses only if they have been affected by these circumstances.
Also, as the insurer does not get any returns from these policies and since the process is rather elaborate, people show less interest, experts believe.
“For a householder’s insurance, the insurer has to declare all domestic appliances, electronic devices and jewellery at home, which many feel is a breach of privacy,” an expert said. At the time of signing off on the policy, the insurer also has to provide purchase bills, details of the model, serial number and year of manufacture of the products that need to be insured.
Experts say this precautionary step is taken to avoid dispute of identity. “Without these details, the insurer can claim insurance for a similar product which is actually not insured,” added the expert. But the norms are simpler for private organisations compared to government agencies.
Most household insurance policies come in packages with fire and burglary insurance made mandatory and jewellery, domestic appliances and electronic appliances cover as optional. Experts say the public are of the opinion that the companies are interested in making policies, but not in settling claims.
But with the claims process being centralised, in cases of theft or fire or damage of appliances due to electrical defects, the insurer can inform the claims hub which processes the claim without the insurer being required to repeatedly approach offices.
Householder insurance covers
- Contents of a house fire accident (excluding jewellery and valuables)
- Burglary and housebreaking including larceny or theft
- All risks for jewellery and valuables
- Plate glass, electrical, electronic and mechanical appliances, apparatus or gadgets, pedal cycles
- Personal baggage, personal effects and other articles carried during travel
- A few insurance companies also provide job loss insurance as an add-on. People will receive loan instalments for three months in case of
- job loss.