Knowledge Centre

Know everything about important home insurance terms

There is a general aversion to buying home insurance without the help of an agent simply because of the apparently scary and hard to understand terminology. Once you know what these terms stand for, it becomes fairly straightforward and easy to purchase home insurance all by yourself. Read on to know more about a few buzzwords, terms and other home insurance details that will make life easy when you are purchasing any home insurance plan.

Sum Insured:

The sum insured of a home insurance policy is the maximum amount the company will reimburse in the event of damage to your home. The default sum insured is determined by the per square foot reconstruction cost  of your home. In addition, the presence of very specific features, furniture, fixtures and electrical appliances need to be declared, so that the sum insured can be arrived at accurately. The sum insured does not guarantee that the entire amount required for reconstruction or repair will be reimbursed.


The home insurance premium is the amount of money that you have to pay the insurance company annually to renew your policy. This amount is calculated based on the chosen Sum Insured, age of your home, coverage selected and other factors.


Coverage lists all the possible risks that your home & its contents are protected from under a particular home insurance policy. Please read the policy documents carefully to determine coverage under each policy.

Standard Fire and Special Perils Policy:

A home covered by a standard fire special perils policy protects you against any losses or damage caused due to natural and man-made perils like fire, floods, storms, earthquakes, strikes, riots, explosions and landslides.

Reinstatement Value Clause:

This clause determines the basis of valuation for  claims payment.. Reinstatement requires that the home insurance building must be repaired or reconstructed at the same location or any other site with property of the same kind or type but not superior to or more extensive than the insured property. This is usually determined by the per square foot current cost of re-construction times the floor area. If the reinstatement value exceeds the sum insured, then the balance amount is to be borne by the insured.

Armed with the knowledge about these terms, getting home insurance becomes an absolute no brainer! HDFC ERGO offers some of the most competitive home insurance policies in the business. You can get home insurance quotes at HDFC ERGO’s webpage and you will see that buying home insurance online is a breeze. If at any point you need assistance, the experts at HDFC ERGO are always ready to help out. So what are you waiting for, get your home insured today!

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