Festive Home Makeover: Does Your Insurance Cover The New Additions?

A festive home makeover often starts with a shopping list: a sofa, a bigger refrigerator, new flooring or a modular kitchen. Once the purchases arrive and the work is finished, there is another list to revisit—what your home insurance actually covers.

The policy bought before these additions may still carry the earlier sum insured. Spending more on your home does not automatically increase the amount available under the policy. Both the cost of rebuilding the property and the value of its contents need a fresh look.

“Many homeowners buy furniture, appliances, and jewellery during the festive season but forget that their home insurance does not update by itself. A policy only pays up to the sum insured declared at the start,” says a Tata AIG official.

Review Building And Contents Cover Separately

Start by separating purchases from improvements to the property. Furniture and appliances affect the contents value. New flooring, fittings, a modular kitchen or an additional room can raise the cost of rebuilding the home.

Building cover should reflect the current reconstruction cost rather than the property's market value. After renovation, homeowners should recalculate this amount using the work completed and the contractor's bills.

Contents cover needs its own review. According to the official, under Bharat Griha Raksha, general contents cover built into building insurance is 20 per cent of the building sum insured, subject to a maximum of Rs 10 lakh. Homeowners whose contents exceed this amount should discuss a higher sum insured with their insurer.

New purchases should be reported and the contents value revised. Jewellery and other expensive valuables may require specific cover. Buying an appliance also does not mean every kind of damage to it is insured; electrical or mechanical breakdown generally requires an add-on, the official explains.

Structural additions require particular attention. The official flags that an extension increasing carpet area by more than 10 per cent may fall outside standard cover unless the insurer has been informed and the additional premium paid. Check the applicable policy wording before assuming the enlarged space is insured.

Check Exclusions And Keep Purchase Records

The review should go beyond the insured amount. Ask what happens if something is damaged while renovation work is underway, or if an appliance stops working after installation.

“Typical exclusions are wear and tear, damage during repair or renovation work, and electrical or mechanical breakdown. Losses when the home is unoccupied are also usually excluded unless the insurer has been notified,” says the official.

For festive travel, check the policy's unoccupancy conditions and notification requirements. The treatment of an empty home depends on the wording; homeowners should establish what applies before leaving. Also check whether valuables must be individually listed.

Keep Goods and Services Tax (GST) bills for new purchases, refurbishment invoices, and jewellery appraisal certificates. Dated photographs or videos of each room and major item can help document what was in the home and its condition.

For claims, Tata AIG asks for a completed claim form, photographs of loss or damage, repair or reinstatement quotations and invoices, and an FIR in theft cases. The official also lists Central Know Your Customer (CKYC) documents for claims of Rs 1 lakh or more.

Notify the insurer promptly after a loss and document the damage. A festive insurance review is best completed while purchase bills and renovation records are still readily available.

FAQs

1. Does home insurance automatically cover new festive purchases?
The sum insured does not increase automatically. Inform your insurer about new purchases and review your contents cover; jewellery may require separate cover.

2. Should I update building insurance after a renovation?
Review the sum insured if renovations raise reconstruction costs. Disclose structural additions and check whether extra premium is payable.

3. What records should I keep to support a home insurance claim?
Retain purchase bills, renovation invoices, jewellery appraisals, and dated photographs or videos. After a loss, document the damage and notify your insurer promptly.