A comprehensive home insurance policy basically has two parts: Content Home Insurance and Structure Home Insurance. Content home insurance covers only the content of your house such as furniture, TV, mobile phones, laptops, jewellery, washing machine and even paintings and collectibles if you endorsed them while purchasing the policy. You can also update the list of content with your insurer while purchasing a new item. On the other hand, structure home insurance policies only cover the structure of your house, i.e. brick and mortar.
Thus, householder or homeowners insurance policies typically cover the structure and contents of a home against the losses or damages caused by fire and other named perils defined in the policy. Therefore, apart from other things, your home insurance policy will cover the costs incurred for repair or reconstruction of the building structure and for the insured contents in case of losses due to fire.
“However, losses due to fire mean there should be actual ignition. Any process resembling fire may not be fire. For example, damage done due to smoke caused by chemical actions or explosion will not be occasioned as fire. Losses due to destruction or damage caused by fermentation, natural heating or spontaneous combustion, any heating or drying process are excluded,” says Rajiv Kumar, MD & CEO, Universal Sompo General Insurance.
So, if the fire is cased by, say, any function or a puja conducted at home, will that be covered by the home insurance policy or not?
“The policy conditions specify exceptions and exclusions relating to coverages provided under the policy. For instance, the term ‘fire’ with respect to insurance coverage must satisfy two conditions: there must be actual fire or ignition and the fire should be accidental. Hence, if the property is damaged by heat or smoke without ignition, it will not be covered under the word ‘fire’. The objective of fire insurance is to make good the financial loss suffered as a result of the accidental fire losses suffered by the policyholder,” informs Kumar.
Therefore, any loss caused by fire lighted during a function at home, leading to an accidental fire, will be covered if it was unintentional and was not due to negligence. However, if the property is damaged only by heat or smoke without ignition, then it will not be covered.
Explaining it further, Tarun Mathur, Director, Policybazaar.com, says that in a comprehensive home insurance policy, damages caused to your house (structure or content) due to fire, earthquake and burglary are covered. Therefore, if any damage happens to the content or structure of your house due to the fire caused during a function or otherwise, your insurer will pay for the claims.
The amount of claim, however, will be decided after quantifying the loss. For example, if the loss is only to the content of your house, the insurer will pay for the content damaged like TV, furniture etc. If your complete house is burnt, then your insurer will consider it a total loss and will pay you the sum insured you were offered at the time of purchasing the policy. “Furthermore, in case of a fire, the insurance company will investigate its cause and then only the claim will be approved. If they have any doubts about the cause of the fire and think the fire was set deliberately by someone, your insurer may deny your claim,” says Mathur.