It's January 1, 2003, and you've just returned from your extended year-end holiday. But this is not the homecoming you had in mind. The bedroom window has been cut open and the room turned inside out. The safe is lying open, your wife's cheaper non-silk sarees are strewn all around and the DVD, home theatre system and the Sony digicam that you had so cleverly hidden in the box diwan, are missing. While you reach for the phone to call the police, your wife does a quick mental calculation. The holiday has cost you Rs 5 lakh. An improbable scenario? Don't bet your house on it.

Take Your Pick

Burglary is one of the most common forms of theft and a growing menace, be it Mumbai or Chennai. Fortunately, you have a bunch of companies offering comprehensive home insurance coverage. The four subsidiaries of GIC-New India Assurance, Oriental India, National Insurance and United India-offer householders policy. Among the private insurers, Bajaj Allianz, Royal Sundaram and Tata AIG offer comprehensive cover. (ICICI Bank's HomeSafe insures housing loan and the property for the duration of the loan.) While the products are quite similar to each other in terms of content and premiums payable, most private insurers allow contents of a rented premise to be covered. Service is, of course, another differentiator.

The householders' policy can be broken down into a base policy plus 10 optional add-ons. The base policy has two sub-sections that cover the building and its contents against fire and accidents such as lightning, gas explosions in domestic appliances, bursting of water tanks, riots, terrorist attacks, earthquake, etc. So if a gas cylinder explodes, or there is a minor fire that damages the wall paint or furniture, you could claim damages from the insurance company. Both the sections of the base policy come for a minuscule premium of 65 paise per thousand rupees worth of insurance. Thus, a Rs 15 lakh insurance for the building and Rs 5 lakh cover for its contents, carries a yearly premium of about Rs 1,300.

The other sections cover burglary/theft, jewellery and valuables, breakdown of domestic appliances, baggage loss, personal accident and public liability. Of the 10 sections of the policy, section 2 is compulsory and a minimum of three sections is required to form a policy. There is a discount of 15-20 per cent on the premium, if the insured opts for more than four sections.

But should you? That depends on your comfort level. Not all of us want our baggage or bicycles to be insured, and if you have a life insurance, why bother taking another personal accident cover? The third-party liability cover, though, is a good idea. It protects you against accidents like, say, your kid knocking a flowerpot onto your neighbour's car. It doesn't cost much: For Rs 1 lakh of cover, you pay an annual premium of Rs 50.

While you sign up for the cover, take care of a few things-like exclusions. Unless your building qualifies as "A-class construction", sections 1 and 2 may not protect you. Similarly, the policy does not cover a premise not occupied for more than 60 consecutive days. The sum insured in case of a personal accident cannot exceed 72 months' salary from gainful employment. Besides, keep a list of all household items, including new purchases. Good records can save you much time and effort at the time of claim.