Bharat Griha Raksha Policy

Jayashree Sridhar,Faculty Member, NIA

 INTRODUCTION

Standard policy developed by Will replace the policy for Dwellings

IRDAI. For Home building and under erstwhile Fire tariff
/or Home Contents

Can be taken by anyone for their

To be effective from 1.4.2021- BHARAT GRIHA residential accommodation
and will fall under Retail
category of products
RAKSHA irrespective of Sum insured

POLICY
Policy can be for one year It can be incorporated as
or more than one year part of package policy or
(Maxm -10 years) other policies
FEATURES… Clause A- Insurance Contract.

Clause B – Defining Insured Events

Clause C – Cover for Home -

Building

Clause D – Cover for Home

contents

• it brings more clarity and transparency

Clause E – Additional Covers to customers.
• It makes things quite raiser for
customers.
• With this move, IRDAI ensures to
Clause F - Exclusions
create awareness about the
importance of home insurance in
India."
FEATURES … CONTD…
Grievances
Waiver of
Underinsurance

Changes to Cover

I K
J
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Policy Conditions.. Other details

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 CLAUSE A – INSURANCE CONTRACT

WHO TAKES THE POLICY SCHEDULE

POLICY --
1. POLICY DOCUMENT 1. Own the structure 1. Personal details
1. Occupying under agreement of sale 2. Policy period
2. POLICY SCHEDULE
2. Authorized occupier of your house. 3. Details of insured property
3. ENDORSEMENTS 3. Your house is occupied by tenant,a 4. Sum insured – basis
4. ADD ONS licensee, employee 5. Covers
5. PROPOSALS 4. You are the tenant under an agreement 6. Add ons
7. Premium paid
 Who can take the policy
As a Owner insured can purchase Home Building Cover as its owner.

If it is a two-storey house. Insured and his family reside in the building and run a
grocery shop in two rooms of the ground floor and personally attend to the grocery
business. They can purchase this policy.

Insured own and reside in a three-storey house. Insured is a partner in a firm that
runs an electronic shop on the ground floor. Five employees attend the shop.
Insured can purchase this policy only for the two floors of the building where he
resides. And can purchase other policies meant for commercial premises to cover
the shop on the ground floor.
 CLAUSE B-INSURED EVENTS - COVERS
Sl No Cover
1 Fire
2 Explosion or Implosion
3 Lightning
Earthquake,Volcanic eruptions, or other
4 convulsions of Nature
Storm,Cyclone,Typhoon,
Tempest,Hurricane,Tornado,Tsunami,
5 Flood and Inundation
Subsidence of the land on which Your
6 Home Building stands, Landslide,
Rockslide
What is not covered
Burning - by order of Public Authority
…
….
…
…
a. normal cracking, settlement or bedding down of new structures
b. the settlement or movement of made up ground
c. coastal or river erosion,
d. defective design or workmanship or use of defective materials, or
e. demolition, construction, structural alterations or repair of any
property, or groundworks or excavations.
Sl No Cover What is not covered
7 Bush fire, Forest Fire, Jungle Fire

Impact damage of any kind, i.e., damage

caused by impact of, or collision caused
by any external physical object (e.g. caused by pressure waves caused by aircraft or other aerial or space
8 vehicle, falling trees, aircraft, wall etc.) devices travelling at sonic or supersonic speeds.
9 Missile testing operations

caused by a. temporary or permanent dispossession, confiscation, commandeering,

requisition or destruction by order of the government or any lawful authority, or b.
10 Riot, Strikes, Malicious Damages temporary or permanent dispossession of Your Home by unlawful occupation by any person.
Acts of terrorism (Coverage as per
11 Terrorism Clause attached) Exclusions and Excess as per Terrorism Clause attached.
Bursting or overflowing of water tanks,
12 apparatus and pipes,
a. repairs or alterations in Your Home or the building in which Your Home is located,
Leakage from automatic sprinkler
13 b. repairs, removal or extension of any sprinkler installation, or
installations.
c. defects in the construction known to You.

Theft within 7 days from the occurrence Excludes if it is a. any article or thing outside Your Home,
14 of and proximately caused by any of the
above Insured Events or b. any article or thing attached from the outside of the outer walls or the roof of Your
Home, unless securely mounted.
 CLAUSE C – COVER FOR HOME BUILDING
4. WHAT DO WE PAY
3. FIXING THE SUM
INSURED AND OTHER Cost of repairing
FEATURE
2.ONLY USE FOR to previous
1.WHAT DOES IT Prevailing cost of condition .. Based
RESIDENCE construction of the building
INCLUDE on the commencement on insureds
Can be covered only
date declared by insured declaration
and accepted by insurer
Residential Unit , if the residence is for Building and Actual
cost of repairs for
Having enclosed used for the purpose
Additional structures
of residence - self
Structure and a roof,
,spouse family, tenant
Basement and used ,employees
only as residential
place+ Additional
Structures..(specific
SI)
 Home Building does not include Contents of the Home.

03 ONLY
BUILDING .

following ‘additional structures’ (same site) a) garage, domestic out-houses used for
02 ADDITIONAL
STRUCTURES
residence, parking spaces or areas, b) compound walls, fences, gates, retaining walls and
internal roads, c) verandah or porch and the like, d) septic tanks, bio-gas plants, fixed
water storage units or tanks, e) solar panels, wind turbines and air conditioning systems,
central heating systems and the like, if not included in Home Contents Cover, and all
structure which is part of home building- giving separate sum insured. & details…

01 BUILDING
+ FITTINGS
Building structure along with fixtures and fittings permanently attached to the
floor, walls or roof, like fixed sanitary fittings, electrical wiring and other
permanent fittings.
 CLAUSE C – COVER FOR HOME BUILDING
4. WHAT DO WE PAY
3. FIXING THE SUM
INSURED AND OTHER Cost of repairing
FEATURE
2.ONLY USE FOR to previous
1.WHAT DOES IT Prevailing cost of condition .. Based
RESIDENCE construction of the building
INCLUDE on the commencement on insureds
Can be covered only
date declared by insured declaration
and accepted by insurer
Residential Unit , if the residence is for Building and Actual
cost of repairs for
Having enclosed used for the purpose
Additional structures
of residence - self
Structure and a roof,
,spouse family, tenant
Basement and used ,employees
only as residential
place+ Additional
Structures..(specific
SI)
USE FOR RESIDENCE
C
A

USED ONLY FOR THE WILL PAY IF…PART OF HOME IS

PURPOSE OF RESIDENCE USED FOR THE PURPOSE OF
– SELF, FAMILY, TENANT EARNING THE LIVELIHOOD,
LICENSEE OR EMPLOYEE ..IF THE INSURED IS SELF EMPLOYED.
...IF YOU HAVE SHIFTED OFFICE TO
…
HOME BUILDING DUE TO
B
LOCKDOWN.. OR CLOSURE DUE TO
ORDER BY PUBLIC AUTHORITY..
WILL NOT PAY IF…..
Home building is used as a
Holiday home, or for lodging
and boarding or any other
purpose other than residential
 CLAUSE C – COVER FOR HOME BUILDING
4. WHAT DO WE PAY
3. FIXING THE SUM
INSURED AND OTHER Cost of repairing
FEATURE
2.ONLY USE FOR to previous
1.WHAT DOES IT Prevailing cost of condition .. Based
RESIDENCE construction of the building
INCLUDE on the commencement on insureds
Can be covered only
date declared by insured declaration
and accepted by insurer
Residential Unit , if the residence is for Building and Actual
cost of repairs for
Having enclosed used for the purpose
Additional structures
of residence - self
Structure and a roof,
,spouse family, tenant
Basement and used ,employees
only as residential
place+ Additional
Structures..(specific
SI)
Sum insured..buildings.

Should be in Reinstatement / Replacement value.

Market value basis – for building as well as contents not permitted

Permitted to allow sum insured which is higher than he defined cost of

construction at the policy commencement date x carpet area … but lower
sum insured is not permitted
 SUM INSURED – DETAILS ..
1. Policy for more than one
01
FIXING
2. Free cover
SUM
INSURED
1. SI - The prevailing Cost of
Construction of Home Building
at the Commencement Date as
declared by insured and
accepted by insurance company
2. It will be the maximum
amount payable in the event the
Home Building is a Total Loss
1. The SI all times to be
maintained during the Policy
year Automatic increase of Period to the full extent of the
Sum Insured during the 03 Sum Insured.
Policy Period by 10% per 2. Once a claim is paid on partial
annum (Maxm 100% of the PRORATA loss the policy shall be restored
SI) INCREASE to the full original amount of
Sum Insured.
3. Premium is proportionate for
the unexpired Policy Period
from the date of loss.
02 4. Can be deducted from the net
1. Automatically increased claim.
INCREASE OF each day by an amount
representing 1/365th of 10%
04
10%- of Sum Insured at the Policy
AUTOMATIC Commencement Date for RESTORATION
annual policies.
OF SUM
INSURED
 BASIS - SUM INSURED FOR HOME BUILDINGS
A) For residential structure of the Home including fittings and fixtures:

• Carpet area of the structure in square metres X Rate of Cost of Construction at the policy
Commencement Date.
• The Rate of Cost of Construction is the prevailing rate of cost of construction of the Home
Building at the policy Commencement Date.
B) For additional structures: the amount that is based on the prevailing rate of cost
of construction at the Policy Commencement Date.)
Additional Structure Sum insured in Rs

• Specify the carpet area & Specify the rate of contruction per square metre at the
policy commencement date
❖Any addition, extension, or alteration to any structure of the Home Building that
increases its Carpet Area upto 10% of the Carpet Area existing at the
Commencement Date or on the date of renewal of this Policy, is automatically
covered
What is carpet area
• Carpet Area
• For the main building unit of the Home, it is the net usable floor
area, excluding the area covered by the external walls, areas under
services shafts, exclusive balcony or verandah area and exclusive
open terrace area, but including the area covered by the internal
partition walls of the residential unit;
• For any enclosed structure on the same site, it is the net usable floor
area of such structure; and
• for any balcony, verandah area, terrace area, parking area, or any
enclosed structure that is part of the Home, it is 25% of its net usable
floor area.
SUM INSURED …Example

The area of the Home Building is 200 sq m is declared by insured

and is accepted by the insurers.

The rate of cost of construction of the Home Building is ₹ 50,000

per sq.m. declared by insured and accepted by insurer

The sum insured would be 200 sqm x Rs 50000 = Rs 1 00 00 000/-

 CLAUSE C – COVER FOR HOME BUILDING
4. WHAT DO WE PAY
3. FIXING THE SUM
INSURED AND OTHER Cost of repairing
FEATURE
2.ONLY USE FOR to previous
1.WHAT DOES IT Prevailing cost of condition .. Based
RESIDENCE construction of the building
INCLUDE on the commencement on insureds
Can be covered only
date declared by insured declaration
and accepted by insurer
Residential Unit , if the residence is for Building and Actual
cost of repairs for
Having enclosed used for the purpose
Additional structures
of residence - self
Structure and a roof,
,spouse family, tenant
Basement and used ,employees
only as residential
place+ Additional
Structures..(specific
SI)
WHAT IS PAID UNDER THE POLICY
REIMBURSE- COST OF REPAIR

A IMP: actual repair to take place –Amount Spend for repairs-

reimbursed by the insurer (BUILDING & Fittings)

NO UNDERINSURANCE

B UI DOES NOT APPLY .

BUILT IN COVER

E up to 5% of the claim amount for reasonable fees of

architect, surveyor, consulting engineer;
up to 2 % of the claim amount for reasonable costs
of removing debris from the site.
Loss of Rent and Rent for Alternative
Accommodation-
WHAT IS PAID – HOME BUILDING
DAMAGE TO BUILDING & FITTINGS PARTIAL
A LOSSES
Cost of Repairs + Architects surveyors , consulting
engieers fees + Debris removal charges + loss of rent
or rent for alternative accomodation
DAMAGE TO BUILDING ALONG WITH FITTINGS – TOTAL LOSS
B
Cost of construction of the entire building – sum insured

DAMAGE TO ADDITIONAL STRUCTURE

C Cost of constriction of the SPECIFIC structure
subject to maxm amount stated against the
structure
Amount payable- cost of construction is less than
what is declared by insured and accepted by us
• In the previous case where the carpet area is 200 sq m and the
construction of the Home Building is ₹ 50,000 per sq.m.
• There is a damage to the home building due to Earthquake which resulted
in a total loss.
• Insurance company’s surveyor assesses the reconstruction cost on the
date of earthquake at ₹ 80,00,000 calculated at ₹ 40,000 per sq m for that
town.
• The claim will be settled for Rs 1,00,00,000/- since we accepted the rate
declared by insured and accepted by insurer
Amount payable – carpet area declared less
• In the previous case where the carpet area is 200 sq m and the
construction of the Home Building is ₹ 50,000 per sq.m.
• There is a damage to the home building due to Earthquake which
resulted in a total loss.
• Insurance company’s surveyor assesses the correct carpet area as
210 sq m as against the carpet area declared by insured as 200 sq m ,
insurer will restrict the liability to what is declared by insured
• The claim will be settled for Rs 1,00,00,000/-
Amount payable – carpet area declared more
• In the previous case where the carpet area declared by insured is
200 sq m and the construction of the Home Building is ₹ 50,000 per
sq.m.
• There is a damage to the home building due to Earthquake which
resulted in a total loss.
• Insurance company’s surveyor assesses the correct carpet area as
180 sq m where as carpet area declared by you was 200 sq m ,
insurer will restrict the liability to the sum insured applicable for
correct carpet area i.e 180 sq m x Rs 50000/- = Rs 90,00,000/-
Built in cover
a) up to 5% of the claim amount for reasonable fees of architect,
surveyor, consulting engineer;
b) up to 2 % of the claim amount for reasonable costs of removing
debris from the site.
c) Loss of Rent and Rent for Alternative Accommodation-
 LOSS OF RENT – For Owner
RENT FOR ALTERNATIVE ACCOMODATION - Tenant
Amount Sum insured for
payable = Sum rent Rs 60000
Owner - If Insured for Tenant - Higher
• Period
the building Cover for Loss rent for the Cover maxm –
necessary for
is occupied of Rent (as alternative three
repairs – 6 Should not be
by tenant, declared by accommodation, years.Certificate
months superior to
employee insured in the will be the from architect to
• Loss of rent existing building
or licensee , Proposal Form difference show that the
period opted for and in the same
– what ever and specified between the building is not fit
– 12 months city as the
is the loss by insurer in rent for for living… Claim
• Amount payable insured
of rent the Policy alternative for loss of rent is
is – (Rs 60000 x propertyour
insured in Schedule) X accommodation subject to
6 months) / 12 Home Building.
the Period and the rent of acceptance of
proposal necessary for months the insured claim to building ..
form .. repairs ÷ Loss • = Rs 30000/- property.
of Rent Period
opted for.
CLAUSE D – HOME CONTENTS COVER
WHAT IS PAID UNDER CLAIM
D

SUM INSURED
C

Who can take this policy B

WHAT IS COVERED
A
 A. What is covered under Home contents ?
• 1) Articles or things of personal : of non-commercial use which are located inside the home.
• 2) General Contents that are usual in any home i.e., furniture and fittings, television sets,
telephones, electronic items, antennas, water storage equipment, air conditioners, kitchen
equipment and other household items.
• Inbuild Cover for General Contents of the home equal to 20% of the Sum Insured for Home
Building Cover subject to a maximum of ₹ 10 Lakh (Rupees Ten Lakh) provided the insured
have opted for both Home Building and Home Contents cover.
• If Insured choose to have a higher Sum Insured for Home(General ) Contents, he can do so by
declaring the Sum Insured in the Proposal Form and pay additional premium
• 3) Valuable Contents (Optional Cover) like jewellery, silverware, paintings, works of art,
valuable carpets, antique items, curios, paintings can be covered by declaration of sum
insured and paying additional premium
• Excludes bullion or unset precious stones, manuscripts, vehicles, explosive substances ,
cannot be covered even by declaring the same.
• Location and use of contents: Location – address of the home and use is purely personal use
and no commercial use.
B –Who can take this policy – Home
contents?

Owner of the building occupying the home – Home

building as well as Home contents

Tenant : Purchase a policy for Home contents owned

by self and for for building if he is responsible by
agreement
 C. Sum Insured – Home Contents

General Contents : Built in cover for 20% of the sum insured – Maxm Rs 10 lakhs)If Building and contents both cover are
taken)but not a free cover.. Insured has to pay the premium for the amount(20% of the building sum insured)

General Contents : Higher Sum insured – By declaration and paying additional premium

If only Home contents policy – Declare Sum insured for General Contents(should be new replacement value).
Examples of Home contents Sum insured…

The carpet area of Your Home Building is 500 sq.m. The rate of cost of
construction for Your home building is Rs 50,00 per sq.m. Home building
sum insured - Rs 25,00,000/-

If opted for both Home Building and Home Contents cover but have not
specifically mentioned anything about Sum Insured for contents in the
proposal. There is an automatice cover for Home contents for 20% of the
Sum Insured i.e for Rs 5,00,000/-(Maxm allowed is Rs 10 lacs)
D - WHAT IS PAID UNDER –HOME CONTENTS …

OPTION OF THE INSURER

• Reimburse the cost of repairs to a condition substantially the same as its condition at the time of damage,
• Pay the cost of replacing that item with a same or similar item,
• Repair the damaged item to a condition substantially the same as its condition at the time of damage.

The maximum amount payable under Home Contents is the Sum Insured shown in the
Policy Schedule for Home Contents Cover.

If the Policy Schedule shows any limit for any item, or category or groups of items,
such limit is the maximum We will pay for that item
 CLAUSE E- OPTIONAL COVER –
PERSONAL ACCIDENT COVER

Cover for Rs 5 lakhs per son. Cover for

Insured or his wife
If insured peril causes damages to the
VALUABLE CONTENTS Building and/or Contents and also results
in Death of Insured or wife- 02

Optional cover– Valuable

contents on Agreed Value Basis
by declaration by Insured and
accepted by Insurer. Valuation is
waived upto SI – 5 lakhs and
individual item cost not more
than Rs 1 lakh.
01
Optional Cover – Valuable Contents
• What is paid

Cover Type of loss Basis of claim settlement

Cover for Valuable Contents on Valuable content is physically Cost of repair

Agreed Value Basis (under damaged
Home Contents Cover) If totally Damaged Sum insured
Optional Valuable content is a Agreed Value
total loss

• If the Policy Schedule shows any limit for any item, or category or groups of items,
such limit is the maximum amount payable for that item damaged.
• Loss to only one item of a pair or set does not constitute loss or damage to
the entire pair or set.
Optional Cover – Personal Accident
• In the event an insured peril that caused damages to the Home
Building and/or Home Contents also results in the unfortunate
death of either insured or spouse, Insurers pay compensation of ₹
5,00,000 (Rupees Five Lakh) per person.
• In the event of the unfortunate death of the insured, the Personal
Accident cover shall continue for the spouse until expiry of the
policy.
CLAUSE F - EXCLUSIONS
. Loss, damage or destruction to any
electrical/electronic machine, apparatus, fixture,
or fitting by over-running, excessive pressure,
Deliberate ,Willful or intentional
Radiation and short circuiting, arcing, self heating or leakage of
act or omission of insured, or
contamination clause. electricity from whatever cause (lightning
anyone on his behalf and in
connivance. included) This exclusion applies only to the
particular machine so lost, damaged or destroyed.

War Perils Pollution or Contamination unless Loss or damage to bullion or

1. . the pollution or contamination itself
has resulted from an Insured Event, or
2. an Insured Event itself results from
pollution or contamination.
unset precious stones,
manuscripts, plans, drawings,
securities, obligations or
documents of any kind, coins
or paper money, cheques,
vehicles, and explosive
substances
CLAUSE F – EXCLUSIONS…CONTD..
Property which is missing or has
been mislaid, or its
disappearance cannot be linked
to any single identifiable event.
Any addition, extension, or alteration to any structure
of the property that increases its Carpet Area by more
than 10% of the Carpet Area existing at the
Loss of earnings, loss by Commencement Date or on the date of renewal of this
delay, loss of market or Policy, unless You have paid additional premium and
other consequential. such addition, extension or alteration is added by
Endorsement. .

Loss or damage to any Any reduction in market value of Costs, fees or expenses for
Insured Property any Insured Property after its preparing any claim.
removed from the repair or reinstatement.
Home to any other
place.
FEATURES … CONTD…
Grievances
Waiver of
Underinsurance

Changes to Cover

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Policy Conditions.. Other details

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CLAUSE G- CONDITIONS..
1. Duty of disclosure to insurers even without
specifically asked for.
2 .Obligation to take care – as if uninsured
3. Inform changes in circumstances
4 . Inspection and investigation of claims
5 .True statements in the claim related papers
. OBLIGATIONS- INSURED
1. Policy – End on the past date
mentioned in the policy
2. Renewal – is not automatic, insured
has to apply .. With details 3. Rejection
from insurer –only on misrepresentation ,
noncooperation on insured’s part.
RENEWAL OF POLICY
 CLAUSE G- CONDITIONS..
1. Cancellation by giving notice to insurer.. Cancellation
will be affected nonce insurer receives the notice & 2
.refund will be as decided by the insurance company
under file & use
3. Cancellation by insurer- only only on misrepresentation,
noncooperation on insured’s part.
4 . Long term policy – cancellation after claim – and when
Restoration of SI has not taken place – cancellation for
remaining duration..after grossing up the premium paid by
insured
CANCELLATION & TERMINATION OF POLICY
1. Destruction of the Home Building –
automatically end after 7 days- collapse
destroyed.. Other than insured peril
2. Exhaustion of Sum insured.
3. Change of use or Home building / Home
contents
4. Sale of property / contents
5. Effect of Death of Insured..
CANCELLATION OF THE POLICY
CLAUSE G- CONDITIONS..
CLAIMS PROCEDURE 1. Prefer a claim with insurance company- Immediate
notice to insured
2. Take steps to prevent loss and damage
3. Immedaite notice to Authorities- Fire Brigade, District
Administration , Police authorities
4. Submit the claim document..within 30 days
5. Establish loss- Onus lies with insured to establish the
event & the extent of pfysical loss
6. Fraudulent claims – cancel the policy, also inform
police
7. Other Insurance – Double insurance – Insured can
select the insurer to claim damages
8. Recovery –Subrogation rights
FEATURES … CONTD…
Grievances
Waiver of
Underinsurance

Changes to Cover

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Policy Conditions.. Other details

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CLAUSE H TO K
A
CHANGES TO COVER

Increase or Reduce the Sum insured..Changes

H are to be requested and will be effective only
when we accept the changes.
WAIVER OF UNDERINSURANCE

I
Underinsurance does not apply to this Policy. if the Sum
Insured calculated on the basis of the information that
D
insured is less than the actual value at risk, the difference
will not affect the amount payable on a claim .

J OTHER DETAILS
Notice ,Nomination ,Applicable law and
Jurisdiction , Arbitration C
GRIEVANCES
K
GRO,Consumer Affairs Department of IRDAI,
OMBUDSMAN
Insurers to…
• Launch the product wef 1.4.2021
• Basic product to be filed before 28.2.2021- pricing ..
• Insurers – .. Add ons for the product by 31.3.2021 ( Maxm 5
products)
• By 30th September again 5 products can be filed
• Premium for the add ons – not to exceed 50% of the base premium.
• Impart Training – Agents , Intermediaries and other permitted
channels
Summing up
• Various coverages are in built in .. Terrorism, STFI, EQ..
• New covers : Theft following operation of insured perils within 7 days,
Volcanic eruptions..
• Sum insured is Agreed ..
• No Underinsurance
• For claims
• Prove insured event has happened
• Extent of physical loss
• Actual Repair should take place to get a claim.. Supporting Invoices for
reconstruction,/ Replacement/ Repairs
• Allow surveyor to inspect loss, take measurements, samples, & photographs