I have inherited substantial amount of jewellery from my mother but I don’t believe in securing it with a bank. In case my home is broken into and the jewellery is stolen, will it be covered by my insurer?

—Name withheld on request

Jewellery at home can be covered under insurance. Typically, an insurer will appoint a valuer to inspect the jewellery and set a value. This helps avoid claim disputes. The rate charged for jewellery insurance is around 1,000 per 1 lakh of sum insured.

You should disclose the safety precautions taken by you to the insurer. While there are no set parameters, there is an implicit expectation that you take “reasonable and necessary" care of your belongings. An upfront disclosure would eliminate interpretation issues later.

I am 33 years old and don’t have any debt. I have no children and my wife works with a top multi-national. Should I still purchase a life insurance policy?

—Nitin Mehta

Theoretically, you do not need insurance because no one is financially dependant on your income. Practically, though, you should buy a term insurance cover while you are young and healthy. Your circumstances may change in the future and it’s best to be well insured.

For example, one of you may decide to stop working or you may decide to have a child. Ideally, both your wife and you should buy a term insurance plan that is about 10 times your annual income.

I own a small catering business and most part of the operations are carried out of my house itself. Do I still need insurance?

—Vimla Sikka

Insurance is as relevant for home as for businesses. You must insure your house. Home insurance rates are significantly cheaper when compared to similar coverage for factories and businesses. If you are conducting your business out of your home, you should disclose this to your insurer. They would apply a risk rating accordingly. The cost of insuring a commercial enterprise is likely to be higher than for just the home.

While making a claim, it is important that there is no ambiguity around the occupancy of the premises. For example, if the surveyor assessing your claim finds multiple commercial gas cylinders at the accident site, she is bound to raise questions. If this is already disclosed to the insurer at the proposal stage, then your claim would not be in jeopardy.

Abhishek Bondia is principal officer and MD, SecureNow.in. Queries and views at mintmoney@livemint.com

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