Skip to main content

What Is Insurance For Unoccupied Property?

Just like a regular insurance cover for the house one is living in, one can also buy a cover for a property likely to remain unoccupied for 30 days or more. This period can vary across different insurers. You could take a cover under property insurance, which covers only damage caused due to a fire. You could also opt for a home insurance package that covers 10-12 scenarios such as fire, burglary, loss of contents, etc. Even if you have purchased a regular home insurance cover and plan to keep your property unoccupied for some time, you are expected to inform the company about it.

Why the need to inform the insurer?

According to insurers, the risks related to unoccupied properties are higher since they may not be maintained in the owner's absence. Companies satisfy claims based on their surveyor's report, which points to the possible causes of the damage. If the property's being vacant for more than the specified period is considered as the cause of the damage, the claim will be rejected. The customer's absence will be considered as concealment of facts, resulting in the consequent damage.

What are the costs involved?

Typically, premiums for unoccupied properties are higher. For instance, if a home insurance cover costs `200 a lakh, the same for unoccupied property will cost `250 a lakh.

When it comes to insurance of an unoccupied property; if one plans to stay away for some time and informs the company about it, there might be a change in the premium, depending on the risks associated with the property. The rise will be done on a pro-rata basis, only for the period the property remains unoccupied. In case the risks are minimised through the installation of safety devices, etc, the premium need not be raised.

What are the exclusions?

The exclusions for occupied and unoccupied properties remain the same. While the scenario of a flood is considered as a natural calamity and covered, there is a deductible against it. So, five per cent of the claim amount, subject to `10,000, will be deducted from the total payable claim amount. Insurers also follow the condition of averages while covering such claims. So, customers get a amount proportionate to the insured value, irrespective of the actual value of the property. If a property is valued at `5lakh and the customer buys insurance just for `1lakh, he has opted for just 20 per cent of the total property value. In case damages cause a loss of `4lakh, the customer will be paid just `80,000, which is 20 per cent.

Popular posts from this blog

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...

ICICI Prudential Balanced Fund

 ICICI Prudential Balanced Fund scheme seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities. The approximate allocation to equity would be in the range of 60-80 per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent, with a minimum of 20 per cent. An impressive show in the last couple of years has propelled this fund from a three-star to a four-star rating. The fund has traditionally featured a high equity allocation, hovering at well over 70 per cent, which is higher than the allocations of the peers. But in the last one year, the allocation has been moderated from 78-79 per cent levels to 66-67 per cent of the portfolio. ICICI Prudential Balanced Fund appears to practise some degree of tactical allocation based on market valuations. Within equities, well over two-thirds of the allocation is parked i...

Guide to pension plans in the form of Insurance

  Pension plans ensure that you are financially secure during your golden years. Take a look at the important aspects that you must keep in mind while opting for one...      Gone are the days when a leading criterion for choosing an employer was the type of pension plan that came with your salary package. Today, more important issues like matching of skill sets to job requirements, scope for personal and financial growth, etc. have come to the forefront. However, this has left individuals with the responsibility of financially planning for their golden years. And it's all for the best as there are a variety of pension plans available in the market to suit different individuals and their specific needs. WHAT ARE PENSION PLANS?     In a pension plan, you are required to pay premiums for a certain number of years and once you reach the retirement age, the insurer returns a lump sum amount that can be then used to purchase an annuity or stream of income for the rest of your life....

Tax Planning: Income tax and Section 80C

In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act. Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:   Provident Fund (PF) & Voluntary Provident Fund (VPF) Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer's contribution. While employer's contribution is exempt from tax, your contribution (i.e., employee's contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free. Public Provident Fund (PPF) An account can be opened wi...

Fortis Mutual Fund

Fortis Mutual Fund, a relatively new player, it is still to prove its case and define its position in the industry. In September 2004, it came onto the scene with a bang - three debt schemes, one MIP and one diversified equity scheme. And investors flocked to it. Going by the standards at that time, it had a great start in terms of garnering money. Mopping up over Rs 2,000 crore in five schemes was not bad at all. The fund house has not been too successful in the equity arena, in terms of assets. Though it has seven equity schemes, it is debt and cash funds that corner the major portion of the assets. Most of the schemes are pretty new, and the two that have been around for a while have a 3-star rating each. The last two were Fortis Sustainable Development (April 2007), which received a rather poor response, and Fortis China India (October 2007). Fortis Flexi Debt has been one of the better performing funds, after a dismal performance in 2005. It currently has a 5-star rating. None ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now