What is the limit of insurance on buildings?

Posted on: Nov 29, 2024 | 3 mins | Written by: HDFC ERGO Team

What is the limit of insurance on buildings?

Most building insurance plans in India can be customised. You can get coverage based on your needs and requirements. For example, if you live in a small 1 BHK in a tier 2 city in India, you can get home insurance coverage of INR 5 lakhs and that will be sufficient. However, if you live in a massive villa in a large, tier 1 city like Mumbai, your home insurance coverage may have to be around INR 5 crores! The coverage limit, therefore, depends on the property value. Let us understand how you can arrive at the perfect figure and get adequate coverage.

Points to remember when choosing home insurance coverage

1. The value of the house

First and foremost, you have to keep the value of the property in mind when you choose the ideal home insurance coverage. For this, assess the current market value of the house and the amount you would need if it is destroyed in a fire or any other peril.

2. The value of the belongings

Next, assess the value of the belongings of the house. From the expensive furniture to the lavish interiors, every aspect must be taken into consideration when buying homeowners insurance coverage.

3. Your budget

You would surely want the highest coverage for your house, but you also need to get affordable coverage. You should be able to clear the premium on time and have the cover active.

Important points to consider

1. The insurer will review your request

Once you submit your application, the insurer will review your request. This will happen mainly when you ask for a higher coverage amount.

2. You must read the inclusions and exclusions

Whether you are opting for a homeowners or renters insurance plan, you need to thoroughly read the terms and conditions to understand the exact scope of coverage. The coverage amount isn't enough; you need a policy that would cover your specific needs, so choose a plan that’s comprehensive and wholesome.

3. You must keep your plan active

Last but not least, you need to pay the premium on time and keep the policy active. When that is done, you will be assured of getting the claim amount as and when you need it. If you do not pay the premium on time, your plan may lapse and even your large home insurance cover won't be able to bail you out of the financial turmoil.

The bottom line

There are many things to consider when setting the limit of your property insurance plan. You have to keep all the points mentioned above in mind and go for suitable coverage, which will keep your property protected and also keep your finances in check.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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