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| Accurate valuation is the key |
| Masoom Gupte / Mumbai Aug 26, 2010, 00:00 IST |
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Last week, Tata AIG General Insurance launched a jewellery and valuables insurance cover for high net worth individuals — a first of its kind. While both public and private general insurance companies have jewellery insurance covers, they are a part of the householder’s policy.
Gaurav Garg, managing director and CEO, Tata AIG General Insurance, says, “The annual premium for a cover of Rs 1 crore will be one per cent of the sum assured. It could vary depending on the risk evaluation of the jewellery.” This product will offer an all-risk cover — loss reimbursement, repair and restoration, preservation and storage assistance.
When you take a householder’s policy and get your jewellery covered under it, the sum insured of the jewellery is based on its market value at the time of taking the policy. An accurate valuation report given by the government-approved valuers is, therefore, very important.
As part of householder’s policy
In the home insurance policy offered by ICICI Lombard, the value of jewellery covered is limited to 25 per cent of the total value of the insured contents. So, if your total contents covered are valued at Rs 10 lakh, only Rs 2.5 lakh worth of jewellery can be covered.
However, Pranay Shah, vice-president, retail-health and home, ICICI Lombard, explains, “This percentage can sometimes be negotiated after referring the case to the underwriter of the insurance company.”
Here, your jewellery is insured against any damage or loss caused due to fire, natural calamities or burglary. However, the cover is applicable only if the loss or damage take place within your residential premises covered by the home insurance.
Premium
A home insurance policy covering the contents of the house is valid for a year. And the premium payable is typically calculated per lakh of the sum insured. It could be Rs 300 per lakh for covering contents, including jewellery against burglary and theft, or almost Rs 1,000 per lakh for an all-risk cover.
The premium could at times be calculated as a percentage of the total sum insured. It could range between 0.3-0.5 per cent of the sum insured. So, for a sum insured of Rs 1 lakh, the premium payable will be Rs 300-500.
Claim settlement
Once you have taken an insurance cover for your jewellery, you must keep a few points in mind with regard to claim settlements.
Scenario 1: Assume your jewellery gets stolen. You had got it insured for Rs 1 lakh based on a valuation done two years earlier. Even if the market value of your jewellery today is Rs 1.5 lakh, you can claim only Rs 1 lakh. “To avoid such a situation, you have the option of over-insuring your jewellery in anticipation of escalation of value,” says Shah.
But, say you over-insure your jewellery for Rs 1.5 lakh. And, you lose it before it has attained that value. In this case, you will receive as compensation the market value of the jewellery, and not the sum insured.
Scenario 2: One of your jewellery pieces gets damaged. The sum insured was Rs 50,000. Say, the insurance company pays you Rs 10,000 for repairing the damage. The sum insured will now get reduced to Rs 40,000. However, when you receive the compensation cheque, you may get the amount adjusted against an additional premium. This will ensure that your jewellery is valued correctly.
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