Everything you need to know about buying home insurance
Your home isn’t just a roof over your head or just a structure made of brick and mortar. For most people, it’s the most valuable asset. This is the reason why a large number of people invest every penny they have into purchasing a home. Hence, it’s natural that you will want to protect it against any accidents, natural disasters, burglary etc. A home isn’t something you can replace quickly or easily if something untoward happens to it. That’s why it is advisable to buy a home insurance policy to protect your home and its belongings efficiently. Ironically though, when it comes to protecting this valuable investment, most Indians are oblivious. However, times are changing, and more homeowners are becoming aware about the importance of a home insurance plan.
Why is it important to buy a home insurance policy?
Natural disasters such as cyclones, floods, earthquakes etc. are common in India. Nearly 30% of the country’s landmass is susceptible to earthquakes and 76% of India’s coastline is prone to tsunamisand cyclones. These calamities can cause extensive damage to houses, properties, infrastructures etc. Therefore, the need for a comprehensive home insurance cannot be emphasized enough.
Buying a home insurance policy is imperative if you want to protect your home and its belongings from unforeseen events. A home insurance policy provides protection to both the structure of the house and its contents, against accidents such as fire, theft or natural disasters like cyclone, flood, earthquake etc. This essentially means that in case of any eventuality the insurance policy will compensate you for the financial losses.
However,any damage inflicted on the property wilfully,are not covered by a home insurance plan.
Types of home insurance policy
Home insurance in India are of the following types:-
Structural Insurance – This covers the structure of the house like the roofs, the walls etc. against damages caused by earthquake, fire, flood and other natural disasters.
Contents Insurance – This type of cover protects only the contents of the house, like home appliances, furniture, fixtures, and other items. This policy is especially meant for tenants who live in a rented home and are vulnerable to damages to their belongings in case of theft or a natural disaster.
Comprehensive Coverage – This policy covers both the structure and the contents of a house and is suitable for people who live in their own homes and are concerned about both the structure as well as its belongings.
Public Liability Insurance – This covers any type of injury suffered by individuals (third party) while they are on your property. It also covers damage caused to another’s property. For instance, if there is a fire in your home and it affects your neighbour’shouse too, your neighbour may raise a financial liability against you. You can file a claim in that case to cover the loss.
Tenant’s Insurance – As the name suggests, this type of insurance is best suited for tenants who live in a rented accommodation and are only concerned about their personal belongings in case of any eventuality.
Which policy to choose?
Now, the question that arises is what type of coverage should you go for? Well...the answer to it depends on the property and the kind of coverage you want.
For instance, if you have purchased a building for investment purposes and are planning to let it out, it’s best to opt for structural insurance because you are only concerned about the structure of the property, walls etc.
On the other hand, if you have recently purchased a house and are planning to live in it with your family, a comprehensive coverage is advisable.
If you’re just a tenant, you’d only be concerned about your belongings.Hence, it’s wise to opt for the tenant’s insurance policy or get coverage on the contents.
The kind of policy you can choose will also depend on the provider. Some companies offer a comprehensive coverage along with home loan, while others may have different policy covers to choose from.
All in all, a home is your biggest investment, and it’s best to protect it with a suitable home insurance coverage that suits your needs perfectly. So, what you need to do is weigh your options, compare different plans for their coverage, features, benefits, premium etc. and then pick the right one.
Note that many companies have add-on features for home insurance policies to increase their coverage, like alternate accommodation etc. For instance, if your house gets damaged because of a fire, you will naturally want some kind of accommodation until you get your house back in order. In that case, an add-on feature will provide you with the extra cover for a temporary accommodation. You need to check with your insurance provider regarding these add-ons.
Before zeroing in on a plan, go through the inclusions and exclusions carefully, so that you are not caught unawares when a calamity strikes. This way, you will lower your risk of a claim rejection too. Read the terms and conditions carefully as well, before taking a policy. So, apply due diligence, and you will save not just your life’s earnings, but also buy yourself some peace of mind.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.