Home insurance and Diwali: Fire coverage, exclusions and how to file a claim

Diwali is a time for families to come together, light diyas and celebrate with loved ones. While everyone hopes the festivities pass without incident, it is useful to know what home insurance covers in case an unfortunate fire accident damages a house or its belongings.

A standard home insurance policy that includes fire as an insured peril may cover eligible damage caused by incidents involving diyas, candles or fireworks.

However, coverage depends on the policy wording, the circumstances of the incident and applicable exclusions.

“A standard home insurance policy, particularly under the Bharat Griha Raksha framework, generally covers physical loss or damage to residential property caused by accidental fire, explosion or implosion. Therefore, if a Diwali firecracker accidentally ignites a fire that damages a house, its insured structure or covered household contents, the loss would generally be admissible, subject to the policy terms and conditions,” said Rakesh Kumar, MD and Founder of Square Insurance, an Indian insurtech company and digital insurance aggregator.

Shilpa Arora, Co-founder and COO of Insurance Samadhan, an Indian tech-based platform and consulting service, said policyholders should check whether their home insurance covers both the building’s structure and its contents. A policy covering only the structure may not compensate for damage to furniture, appliances, electronics and other household belongings.

Shrish Mahuli, Chief Business Officer at SBI General Insurance, a joint venture primarily promoted by the State Bank of India (SBI), said home insurance policies covering fire can protect against eligible losses arising from Diwali-related incidents, including those involving diyas, candles and fireworks, subject to policy terms and conditions.

Under SBI General Insurance’s Griha Raksha Plus policy, insured perils include fire, explosion or implosion, lightning and other specified events. However, losses caused deliberately by the insured are excluded, the insurer said.

What should homeowners check in their home insurance policy?

Before filing a claim, homeowners should check the coverage, sum insured, deductibles and exclusions specified in their policy.

Arora said policyholders should review exclusions relating to deliberate acts, wilful misconduct, unoccupancy and other circumstances specified in the policy. They should also check the terms governing damage caused by smoke, soot and firefighting operations rather than assume these are automatically covered.

The sum insured should adequately reflect the property’s reconstruction cost and the value of its contents. Underinsurance can affect the amount payable, depending on the policy conditions. Arora also advised homeowners to maintain an updated inventory of valuable belongings and retain purchase invoices wherever possible.

How to file a home insurance claim after a fire accident

If a fire accident occurs, the first priority should be the safety of occupants. Homeowners should evacuate if necessary, contact emergency services and inform their insurer promptly once the immediate danger has passed.

Arora advised policyholders to document the damage before cleaning up or disposing of affected belongings, provided it is safe to do so. Photographs and videos of the damaged structure and household items, along with an itemised inventory, can help establish the extent of the loss.

Insurers may ask for the following documents during claim assessment:

• Completed claim form and home insurance policy details.
• Photographs and videos of the damaged property.
• Itemised list of affected belongings.
• Purchase invoices, bills or warranties, wherever available.
• Repair estimates for structural damage and replacement quotations for damaged items.
• Fire brigade or police report, wherever applicable or requested.
• Identity proof, bank details and other documents required by the insurer.

The insurer may appoint a surveyor or loss assessor to inspect the property and assess the damage.

Mahuli said policyholders should preserve damaged items until the insurer or its appointed surveyor has had an opportunity to inspect them, wherever safe and practical. Essential repairs to prevent further damage should not be delayed, but the insurer should be informed and related expenses documented.

The final claim assessment depends on the evidence submitted, the surveyor’s findings and the applicable policy terms and conditions.