Has your oven, bought this Diwali, stopped functioning? Is the washing machine purchased through a card swipe giving you a hard time? Has your wife been robbed off the jewellery you gifted on the New Year’s Eve? If you have been repenting the decision of not opting for a home valuables’ insurance, stop repenting and check your card bill for the purchase date.
Even though you may not have a valuables insurance plan, your credit card or debit card issuer can come to your rescue.
Banks offer a purchase protection insurance cover on credit and debit cards. So if you purchased any goods in the past 90 days using the card and there is damage during transportation to home, theft or
damage due to fire, you can claim the damages.
“Any item purchased through IOB-VISA is insured against the risk of fire, riots, strike, malicious damage, terrorism and theft during transit (from the place of purchase to the residence),” according to Indian Overseas Bank.
ICICI Bank offers cover for goods bought through its debit cards, while Standard Chartered Bank insures card purchases through Extended Protection Plan. Banks such as Axis Bank offer the cover on limited cards such as Infinite and Signature Cards. This Purchase Protection cover is offered apart from the Personal Accident Cover and Credit Shield insurance that credit and debit cards offer for free or at a nominal fee.
Most banks insure tangible goods purchased 90 days ago, but banks such as Indian Overseas Bank limit the cover to purchases made during the last 30 days. The cover limit depends on your card and varies from Rs 25,000 to Rs 5 lakh per annum.
Even though the cover is offered to most card holders, chances are that your neighbour would be able to claim his damages, but your claim might be rejected. There are several reasons for this.
For the insurance cover to be valid you will have to make sure your card is active. So, if there have been no transactions on your card after you bought the oven, washing machine or jewellery then you may be in for a surprise. The purchase protection cover is invalid on inactive card – not used in the past 30-90 days (depending on the issuer).
Check if your bank has set a minimum spend limit too, for instance Rs 499 in case of ICICI Bank in the past month, for the card to be active.
Banks know how to reward their good customers and penalise those with bad repayment history. If you have defaulted on your card bill payment then too the insurance claim won’t be acceptable. On select occasions banks may keep insurance claim proceeds in escrow account until outstanding credit card bill payments have been cleared.
To weed out misuse of the cover and avoid claims where the owner has been careless, certain restrictions have been put in place. So, if you are claiming damages for robbery, then a condition applied is that the product purchased should have been stolen from your home.
Now if you are residing in a different premise than what is registered with the bank then your claim would be disallowed. Ensure your current address is registered with the bank.
The purchase protection is offered by the card company through a tie-up with a general insurance company, and hence the claim request and relevant documents should be mailed to the insurance company and not the bank.
Also, in all cases of claim, the insurance company should be held liable for grievances and settlement of the claim, instead of the bank.