What RWA and flat owners need to know about fire insurance

Our resident welfare association (RWA) has taken fire insurance covering the structure of the building. As a flat owner, would my flat be covered if a fire occurs only in my flat without affecting the overall building? What is the process in such a case? What coverages should the RWA ideally have? Anything specific that I should take care of?

• Name withheld on request

Several RWAs take fire insurance for group housing complexes, which helps with administrative ease and cost efficiency. In such cases, even if a single flat is damaged due to covered perils, the claim is admissible. Whenever an incident occurs, the RWA must immediately inform the insurer. The insurer then appoints a surveyor to inspect the site and assess the claim.

All claim documents need to be submitted by the flat owner to the surveyor for scrutiny. Generally, once the claim is intimated, the surveyor coordinates with the flat owner. After document verification, the surveyor recommends a claim amount to the insurer, which is then paid directly to the flat owner.

Apart from standard fire insurance, the RWA should opt for a specific add-on called Rent for Alternative Accommodation. In the event of a major fire or other insured damage, the flat may be uninhabitable until repairs are completed. With this add-on, the policy covers rent for short-term alternative accommodation.

Additionally, flat owners should ensure coverage for contents of the flat, not just the structure. Typically, RWAs limit coverage to the building structure, as content value varies across flats. Flat owners can purchase a separate policy to cover the contents of their homes.

How does deductible work in health insurance? Does increasing or reducing the deductible affect the premium?

•⁠ ⁠Name withheld on request

A deductible in health insurance is the threshold up to which claims are not payable under the policy. Policyholders can claim amounts exceeding the deductible. Expenses up to the deductible must either be claimed from another policy or borne by the policyholder.

Deductibles help insurers limit exposure to frequent, low-value claims such as cataract or hernia treatments, which typically fall within the deductible amount. Insurers offer substantial premium discounts when a deductible is introduced. The higher the deductible, the greater the discount, resulting in a lower premium.

Abhishek Bondia is co-founder and principal officer of SecureNow Insurance Broker.