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Insurance for Expats in India

Submitted: August 2013

Do not wait for problems to arise before reviewing your insurance arrangements. Once you have a problem, it is already too late. Being poorly insured is risky whereas being over-insured is expensive.

Insurance products are available in India, and it is advisable to compare the market before taking out an insurance policy.

In certain cases, premium payments to a foreign insurer may be disallowed by foreign exchange regulations (e.g. if the insured asset is located in India).

If you are unclear about your cover or your needs whilst being in India, you might wish to check your existing insurance arrangements in your country of origin. This is important if you want to avoid double coverage.

Home insurance

Home insurance is divided into buildings insurance and contents insurance. You can also apply for joint cover.

A buildings insurance policy protects you against damage to your building. This may cover the costs of rebuilding your property from scratch or the costs of certain exceptional repairs. On the other hand, a contents insurance policy covers your personal belongings only.

As for all insurance policies, it is up to you to decide how generous you want your cover to be, what the excess amounts are, which unexpected expenses are covered (e.g. alternative accommodation or legal costs), etc.

Typically, you only need buildings insurance if you own your home. However, you might need contents insurance, regardless of whether you own or rent your home.

Going away from home

If you expect to be away from your home for more than one month, you should let your insurer know. Failure to do so may result in a claim being rejected if something happens to your home whilst you are away.

Home insurance exclusions

Check if something is excluded from your home insurance policy. If you live in a high risk area (e.g. with regard to floods), your insurer may require you to pay extra to be covered on some risks that your insurer would otherwise exclude.

Uncovered risks may include, but are not limited to:

  • floods
  • earthquakes
  • terrorism
  • burglary or theft (for contents insurance)
  • war

Vehicle insurance

By law, you must have car insurance if you drive a car in India, and your policy must include at least third party cover. This should insure you against potential liabilities for third party death or bodily injury, but not damage or theft of your own car.

If you need your vehicle to have more than just third party cover, you might wish to take out a comprehensive vehicle insurance policy.

Health insurance

Regarding health insurance, expatriates may take out an international cover from an insurer in their home country. International covers tend to be more expensive, but they are straightforward and they can spare you the need to have separate insurance policies (i.e. one in your home country and one in India). Expats who frequently cross borders are more likely to need an international cover to achieve peace of mind.

Health insurance is strongly recommended even if healthcare in India is not apparently expensive. This is because: (1) health insurance may attract tax benefits; and (2) you might need medical repatriation. See HEALTHCARE – Health Insurance for Expats in India.

Life insurance

Life insurance can be particularly helpful if your family is financially very dependent on you, as it may guarantee a lump sum payment to your family if you die.

Do assess carefully the burden of retaining foreign life insurance while you are resident in India. Do also check the geographical extent of your existing life insurance policy when you move across borders.

Business insurance

If you run a business in India, you must have personnel insurance and public liability insurance.

Personnel insurance protects you in case one of your employees has an accident or an illness in connection with his/her employment duties.

Public liability insurance covers you against certain third party claims against your business. This may also include legal costs.

 

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