Readers' Corner

I am going abroad for two months and renting out the place for that period. Will my house policy remain valid while I am away?
Home insurance policies are valid for at least one year. If your policy does not expire during the two months of your travel, it will remain valid even while you are abroad. There are two components of a home insurance policy, which you need to choose explicitly at the time of purchase - cover for the structure and cover for contents. The first component covers the structure of your house and will be in force even if your house is rented out. With regard to the cover for content (within the house), your home insurance policy will cover only your belongings. Any content brought in by the tenant would not be covered.

I recently bought a health cover for my mother, who turned 61 two months after the policy had been issued in December. I am paying insurance premium of Rs 36,000 on her behalf. What will be the tax treatment for this financial year?
Section 80 D of the Income Tax Act specifies, "deduction is available up to Rs 20,000 for senior citizens (60 years and above) and up to Rs 15,000 in other cases for medical insurance of self, spouse and dependent children". In your case, as your mother has crossed 60 years, you will be eligible for a deduction of income to the extent of Rs 20,000 for tax computation purposes in the current financial year.

My car was recently damaged in an accident. The repairs cost me roughly Rs 10,000. Should I make a claim or pay from my pocket to preserve no-claim bonus status?
A claim-free history helps keep your car premium low in the subsequent years. In fact, insurance companies use no-claim bonus (NCB) as a rating or underwriting parameter to arrive at the premium amount. Preserving the NCB earned over a period does help in lower premium rates, and transfer of NCB to a new car purchased. However, the decision to not intimate a claim and preserve the NCB is your prerogative. You should consider the annual insurance premium outgo, quantum of NCB in case of no claim and any plan to buy a new car while arriving at this decision.

Two weeks ago, a fire broke out at my cousin's place. This was due to a short circuit in the water heater. The case was investigated by insurance surveyors. However, the surveyor's report has agreed to pay only 50 per cent of the claim. The loss incurred could be up to Rs 1 lakh. Please advise.
It would be prudent of your cousin to obtain details regarding the reduced claim reimbursement amount from the insurance company. This may have been arrived at by the depreciated value of the damaged articles. It may be possible the items damaged in the fire at your cousin's place were old and thus their value depreciated, resulting in the payment being lower than the amount claimed.

Bhargav Dasgupta,
MD & CEO, ICICI Lombard General Insurance
 

The views expressed are the expert's own. Send your queries to yourmoney@bsmail.in