House Burned Down? Insurance Pays for Repairs, But Who Pays Your Rent? The 'Alternative Accommodation' Rider Explained

House Burned Down?

Imagine this: A short circuit in your AC unit causes a major fire in your apartment in Mumbai. Thankfully, everyone is safe. But the house is destroyed.

The contractor says it will take 6 months to repair the wiring, paint the walls, and fix the flooring. You cannot live there.

You have a Home Insurance policy. Great! It pays ₹20 Lakhs for the repairs. But now you have a new problem: You need to rent a flat for 6 months while still paying the EMI on your burnt house.

If the rent is ₹60,000/month, that is a ₹3.6 Lakh expense out of your pocket. Unless... you have the "Rent for Alternative Accommodation" cover.

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What is Alternative Accommodation Cover?

Standard Home Insurance covers the "Structure" (walls) and "Contents" (TV, Sofa).
Alternative Accommodation covers YOU.

If your insured home becomes uninhabitable due to a covered peril (Fire, Flood, Earthquake, Storm), this section of the policy pays for the cost of shifting to a temporary residence. This could be:

• Rent for a similar apartment nearby.
• Packers and movers charges (in some premium policies).
• Emergency hotel charges (for the first few days).

The "Bharat Griha Raksha" Bonus (And Its Limit)

Here is the good news. Since 2021, the IRDAI standard home insurance policy called Bharat Griha Raksha usually includes this automatically.

But here is the catch: The standard limit might be too low for 2026 prices.

⚠️ Check The Limit Carefully

Under the standard Bharat Griha Raksha policy, the limit is often capped at:

• Per Month Limit: Often capped at ₹50,000 per month (or 0.5% of Sum Insured).
• Maximum Duration: Usually capped at 6 months.

(Reality Check: In cities like Mumbai or Gurgaon, finding a furnished temporary flat for ₹50,000 is difficult in 2026. You may need to pay extra premium to increase this limit to ₹1 Lakh.)

For Tenants: The Landlord Won't Pay

This is a massive misconception. If you are a tenant and the flat catches fire, the landlord gets the insurance money to fix the walls. He is NOT legally required to pay for your hotel or temporary rent.

You get evicted. Period.

Unless you have your own Renter's Insurance (Content Insurance). If you have this policy, the insurer will pay for your temporary shift and the rent difference.

What is NOT Covered?

Be careful. This cover does not pay for everything.

• Upgrades: If you lived in a 1BHK but rent a luxury 3BHK hotel suite, they will not pay the full amount. They pay for "comparable" accommodation.
• Food & Laundry: If you stay in a hotel, they pay for the room tariff only. Your room service biryani is on you.
• Voluntary Renovation: If you move out because you are repainting the house for Diwali, this cover pays ₹0. It only triggers if the house is damaged by an accident (Fire/Flood) and declared "Uninhabitable."

Action Plan: Check Clause 4

1. Read Your Policy: Open your policy document (PDF). Search for "Rent for Alternative Accommodation" (usually Clause 4 in standard policies).
2. Check the Sub-Limit: If the limit is ₹20,000 or ₹50,000, calculate if that covers rent in your area today. If not, ask your agent to "enhance the limit." It costs peanuts (₹200-₹500 extra per year).
3. Keep Rent Agreements: If you make a claim, the surveyor will demand a valid Rent Agreement or Hotel Bill to reimburse you. No cash deals.

(Disclaimer: Coverage details vary by insurer (Digit, Acko, ICICI Lombard, etc.). The Bharat Griha Raksha terms are standard, but customized 'All Risk' policies may differ. Always verify the per-month cap.)

Protect Your Savings

A fire destroys your past (memories). Don't let the rent bills destroy your future (savings). Ensure your policy pays for your shelter, no matter what.