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    Insuring Your High Rise Dreams

    Spokesperson - Deepak Sankar, Sr. Vice President & National Head - Speciality Lines & AIGC, Tata AIG General Insurance Company Limited

     

    Q1. Why fire or property insurance is must for housing society as well as high rise buildings (flats)?

     

    Housing societies are generally exposed to various types of perils and operation of these perils can have devastating effect on its financials. Laws applicable to such societies generally mandates them to adequately insure their building structure and other common utilities against Fire & allied perils like lightning, storm, flood, inundation, earthquake etc. India, in the recent past has experienced natural calamities of unprecedented magnitude like Floods in Kerala, Chennai & Uttarakhand and Cyclones in the east coast. In addition to these natural perils, man-made calamities such as fire is on the rise and has caused extensive damages to both property and lives in the recent past.

    With cities getting congested, we often see residential structures next to commercial establishments. The different types of users in a small pocket pose a challenge to fire safety. Loss emanating from one flat in a housing society due to a gas leak or a short circuit are often spread across to others causing heaving damage. One of the major hazards in high rise residential buildings is that fire can rapidly spread from one area to another through elevator shafts, space between the wall & cladding, garbage chutes, storage areas, air conditioning ducts etc. As the buildings gets taller, fire brigade may not be able to reach the higher floors in case of a fire leading to major disasters.

        

    No matter how much precaution you take, there will usually be some loss caused by fire or some other major perils. To minimize the financial impact of the damage caused, a fire insurance policy is recommended. It helps to cover the cost of replacement, repair, or reconstruction of property. It covers building and other assets such as water tanks, elevators, pipeline & fittings, electrical installations, DG sets etc.

     

    Q2. What is the claim procedure of fire insurance? What will happen if the original policy document is lost or missing at the time of claim?

     

    In case of a fire incident, every Insured should contact the Insurance Company and register a claim preferably in writing, stating the correct policy number. You will also need to fill up a claim form and submit it to the insurance company in order to get your claim process to begin. The claim form requires basic information about your insurance, a description of how the fire or the peril occurred and will usually highlight the furniture, fixtures and other assets that were destroyed during the incident with the resultant financial implication.

    Once you inform the insurance company, a surveyor will visit your premises to assess the damages and to validate the claim that has been made. He may ask for an asset list of the property, and after discussing the case with concerned parties, will submit the claim to the insurance company along with his report. During this process, the surveyor may need additional documents and information in order to arrive at a conclusion, and may ask for documentary evidence. This could include photocopies of necessary documents, a history of the property, or other requisite details.

    Policy number is sufficient to register a claim with the insurer. Insurer maintains database of all current policy as per IRDA mandate and hence no insurer can repudiate any claim for not having original policy copy.

     

    Q3. How is fire or property insurance premium calculated? What are the factors that matters to determine rates for fire or property insurance?

     

    Property insurance premium is arrived by applying the fire rate (calculated by the Insurer) on the Sum Insured.  Rates are typically dependent on the following factors:

     

    • Sum Insured
    • Risk Location (Earthquake rates different for different earthquake zones)
    • Class of construction
    • Add-Ons required ( Property insurance also provides insured option to increase their coverage additional to standard cover)

     

    Apart from these Insurers also consider the factors such as preparedness for fire fighting, past loss history, kind of risk involved, elevation, accumulation of exposure etc. in calculating rates.

     

     

    Q4. What is covered under fire insurance? What are the major exclusions? 

     

    Following are list of perils covered under fire insurance and perils wise embedded exclusions.

     

    List of Perils Covered

    Major Embedded Exclusions

    Fire

     

    a) its own fermentation ,natural heating or spontaneouscombustion

    b) Its undergoing any heating or drying process.

    c) Burning of property insured by order of any Public Authority.

    Lightning

     

     

    Explosion/Implosion

     

    To boilers (other than domestic boilers), economizers or other vessels, machinery or apparatus( in which steam is generated) or their contentsresulting from their own explosion/implosion

     

    Aircraft Damage

     

     

    Riot, Strike and Malicious Damage

     

     

    Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation

     

     

    Impact Damage

     

    Impact by any Rail/ Road vehicle or animal by direct contact belonging to or owned by

    a) the Insured or any occupier of the premises or

    b) their employees while acting in the course of their employment

    Subsidence and Landslide including Rock slide

     

     

     

    Bursting and/or overflowing of Water Tanks, Apparatus and Pipes

     

     

    Missile Testing operations

     

     

    Leakage from Automatic Sprinkler Installations

     

    Excluding loss, destruction or damage caused by

    a) Repairs or alterations to the buildings or premises

    b) Repairs, Removal or Extension of the Sprinkler Installation

    c) Defects in construction known to the Insured

    Bush Fire

     

     

     

    Other Major Exclusions are:

     

    1. Policy deductibles/Excess
    2. Consequential Loss
    3. Damage due to war, invasion and act of foreign enemy
    4. Damage to machinery due to over-running , internal short-circuit, excessive pressure
    5. Theft after operation of insured perils




    Information & Disclaimers