Home insurance: Do not alter fire-damaged property before insurer survey

Preserve evidence of damage by taking photographs or videos

Recent fire incidents in high-rise residential buildings across the National Capital Region have once again raised concerns about safety preparedness and financial protection for homeowners. Structural safety and emergency response remain critical issues, but these events have also highlighted a less-discussed aspect: inadequate home insurance coverage.

 

Many residents rely solely on society-level fire insurance policies and overlook gaps that could leave their homes and personal belongings underinsured. Experts say a well-structured individual home insurance policy can safeguard both property and finances after such unforeseen disasters.

 

Limits of society fire cover

 

According to industry experts, society policies often provide only basic coverage, while personal plans cover both the home’s structure and valuable contents based on the owner’s specific needs. “They also offer added benefits like temporary accommodation if your home becomes uninhabitable, ensuring better financial security and peace of mind. Therefore, even if your housing society has a group fire policy, an individual home insurance plan is essential for comprehensive protection,” says Gurdeep Singh Batra, head-commercial underwriting, risk engineering services and global accounts, Bajaj Allianz General Insurance.

 

Structure and contents: Insure both

 

A comprehensive home insurance plan covers both the building structure and its contents, including furniture, electronics, jewellery, and other valuables. These items often represent significant investments and should form part of the home insurance policy. “Homeowners living in their own property should opt for a comprehensive plan that covers both the structure and its contents. Tenants, however, can choose coverage limited to contents, as their insurable interest is confined to their personal belongings,” says Batra. 

 

Right sum insured for structure

 

The sum insured should reflect the actual cost of rebuilding the property, not just its market value. Insurers offer different valuation methods for this purpose.

 

The reinstatement value covers the full cost of reconstructing the house to its original condition without factoring in depreciation. The market or agreed value is based on the current resale price or a pre-agreed amount. The former is preferable.

 

“An escalation clause can be added to automatically increase coverage over time in line with rising construction costs, helping prevent underinsurance,” says Batra.

 

Right sum insured for contents

 

Homeowners should base the sum insured for contents on the actual replacement cost of items, not their resale value. Policies typically offer two approaches: “new for old”, which replaces damaged items with brand-new ones without depreciation, and “indemnity”, where the claim reflects the item’s current depreciated value. The right choice depends on how much protection the homeowner wants against loss.

 

“Valuables like jewellery can be insured at market or agreed value, while artworks must be covered on an agreed value basis. Homeowners can also opt for worldwide coverage for portable items. It’s important to maintain a detailed inventory of belongings, along with invoices or valuation certificates, to ensure accurate coverage and a smooth claims process,” says Batra.

 

What home insurance covers in a fire

 

Home insurance acts as a financial safety net in case of fire. It covers visible damage as well as related expenses. It pays for repair or reconstruction of the home’s structure, along with costs such as debris removal and professional fees.

 

“It also covers loss or damage to household contents like furniture, appliances, and electronics, with valuables often subject to limits or a separate declaration. If the home becomes uninhabitable, the policy may also cover temporary accommodation expenses like rent or hotel stays,” says Ashwini Dubey, business head, home insurance, Policybazaar.com.

 

Key exclusions

 

Home insurance policies typically exclude losses caused by wilful damage or negligence, as well as wear and tear, ageing, corrosion, seepage, and poor maintenance. They also do not cover losses from war or related events, indirect damages, or items such as bullion, unset stones, manuscripts, vehicles, and explosives.

 

“Natural disasters such as earthquakes and floods are usually not part of the base policy and must be added separately,” says Dubey. Policyholders should review the policy document carefully to understand all exclusions.

 

Common causes of claim disputes

 

Homeowners play a key role in keeping their insurance coverage valid and effective. They should provide complete and accurate details about the property and its contents at the proposal stage. They should also take reasonable steps to safeguard the home.

 

At the time of a claim, policyholders should report the loss promptly, make full disclosure, maintain proper documentation, and cooperate with the insurer. “It is also important to inform the insurer about any material changes, such as address updates, structural alterations, change in usage, renting out the property, or if the home is no longer self-occupied, to ensure smooth claims and uninterrupted coverage,” says Dubey.

 

Key add-ons

 

Along with basic fire cover, homeowners should consider add-ons for broader protection. These include coverage for natural calamities such as storms, floods, and earthquakes, as well as acts of terrorism. “Burglary and theft cover protects household belongings, while valuables protection ensures items like jewellery are covered even outside the home,” says Shilpa Arora, co-founder and chief operating officer (COO), Insurance Samadhan.

 

Electrical or mechanical breakdown cover can also protect appliances damaged during incidents such as fire, making the overall policy more comprehensive.

 

Fire claims: Dos and don’ts

 

After a fire, policyholders should act quickly and follow proper procedures to ensure a smooth claim. They should inform the insurer immediately and notify the fire brigade or police without delay. They should preserve evidence by taking photographs or videos of the damage before any clean-up and cooperate fully with the surveyor by sharing documents such as invoices, repair estimates, and proof of ownership.

 

“At the same time, avoid tampering with damaged property before inspection, as this can affect claim assessment. Delayed reporting, exaggerating losses, or failing to maintain basic fire safety compliance can also lead to complications or even rejection of the claim,” says Arora.

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The writer is a Delhi-based independent journalist