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We made a claim on our family health insurance, which we have been renewing for the past 10 years, in 2016 for my husband’s appendix operation. There were no claims before or after that. Will the subsequent years in which no claim was made be eligible for no-claim bonus (NCB)?

—Sayema

There would be a reduction in NCB in the year 2016 in which you made a claim on your health policy. However, in the subsequent years, as there were no claims, NCB will accrue without any effect of the claim made in 2016. NCB is applicable for every policy year where there is no claim for the entire policy year. So, your NCB should have duly accrued in the last four years.

You should note the maximum cumulative NCB allowed in the policy. Once you reach the ceiling, even if there is no claim, further bonuses will not accrue. Also, check the policy terms to see how much your sum assured reduces after you make the claim. The law requires that the basic sum assured remains intact but insurers reduce NCB after a claim in different ways.

My house is getting renovated. I live on the third floor. The person who lives on the second floor is very fussy and has gone to the court against us over a minor issue. I fear if any construction material falls by mistake on his balcony, he can create trouble. Can I get a liability insurance while my house is under construction? Is such a policy part of home insurance? I plan to buy home insurance once the renovation is completed?

—Amar

Yes, you can get a liability insurance to cover against possible third-party liability if any construction material falls in your neighbour’s house and damages it. You could buy this as a part of construction all-risk policy. This will cover any financial loss suffered by you in case of fire, earthquake or any other accidental damage while the house is getting renovated. Also, it will cover third-party liability, including litigation brought by your neighbour. You can alternatively buy a stand-alone third-party liability insurance.

Liability insurance is also offered as an add-on for home insurance and can be taken by paying an additional premium. Once the renovation is complete, you can buy a home insurance plan and choose coverage for third-party liability under the policy for future liability claims. Again, you can also buy a stand-alone cover.

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

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