1 day ago
Cheaper Fire Insurance Requires Homeowners to Check Coverage
Fire insurance has become cheaper in India because insurers are competing strongly for customers.
This does not automatically mean that every cheaper policy is the best choice.
Homeowners should check how much it would cost to rebuild their home, rather than relying only on its market value.
They should also insure valuable furniture, electronics and other household items.
Different places may need protection from different risks, such as floods, storms, earthquakes or landslides.
Some policies leave out these risks or cover them only if the customer pays extra.
A cheaper policy may also have a larger deductible, meaning the homeowner pays more before the insurer helps.
People should compare all these details when renewing instead of choosing only the lowest price.
Fire insurance premiums fell 28% to ₹10,062 crore during April-July, according to General Insurance Council data.
Aggressive discounting and available reinsurance capacity have intensified competition, especially for commercial and industrial risks.
Homeowners should assess reconstruction costs, household contents, exclusions, deductibles, sub-limits and add-on covers.
A lower premium may involve a higher deductible or narrower protection, while underinsurance can cause a payout shortfall.
At renewal, policyholders should reassess coverage; businesses should also consider losses from prolonged shutdowns.
- Who
- Homeowners, businesses and insurers in India, with views from insurance and research executives.
- What
- Fire insurance premiums have declined sharply, prompting advice to compare coverage quality rather than price alone.
- Where
- India.
- When
- During the first four months of the financial year, April-July; the advice also applies at policy renewal.
- Why
- Competition among insurers, aggressive discounting and available reinsurance capacity have reduced prices, while rising rebuilding costs make coverage reviews important.
Key facts
- Premium decline
- Fire insurance premiums fell 28% in April-July.
- Premiums collected
- Premiums were ₹10,062 crore, compared with ₹14,063 crore a year earlier.
- Main pricing factors
- Aggressive discounting, insurer competition and available reinsurance capacity supported lower prices.
- Sum insured
- Building cover should generally reflect reconstruction or reinstatement costs, not simply market value.
- Policy details to review
- Homeowners should check exclusions, deductibles, sub-limits and add-on covers.
- Potential risks
- Depending on location, relevant risks may include flooding, storms, earthquakes, landslides and water damage.
- Business protection
- Businesses may need business interruption cover for losses caused by a shutdown after a fire.
Quotes
Santosh Sahoo
Vice president of SME insurance at Probus
“At renewal, policyholders should not simply renew the same cover or pick the cheapest option. They should reassess whether the sum insured still reflects the current reinstatement or replacement cost, and check any changes in exclusions, deductibles, sub-limits and add-on covers.”
CNBC TV 18
“For a customer, this is actually a good time to review the insurance programme and negotiate better coverage, rather than simply asking for the lowest premium.”
CNBC TV 18
Sources
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