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What is the eligibility to buy home insurance

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Published on May 17, 2021. EST READ TIME: 3 minutes

What is Home Insurance?

Home insurance, also referred to as homeowner’s insurance, is a type of insurance that covers any damage or loss to your home and the contents of your home. Your home is an expensive asset. In some cases, it is the most expensive asset you own. To protect your finances and secure your home against unforeseen risks to your home such as natural calamities, burglary, theft, or a fire, financial institutions offer home insurance schemes that provide insurance cover for your home in the same way that health insurance covers unforeseen medical expenses. Home insurers charge a monthly or annual premium to the beneficiary, guaranteeing that the expenses arising out of specified loss or damages will be covered by the home insurance plan.

What does Home Insurance Cover?

Home insurance can cover a range of different financial liabilities that may arise out of damage to your home or valuable possessions contained within the home. Home insurance can cover:

• Damage to expensive assets contained within the home such as jewellery, art, wine, furniture, antiques, appliances, etc.

• Loss of any valuable possessions contained within the home due to theft or burglary.

• Damage to the home arising out of a fire, flood, earthquake, cyclone, etc.

The insurance payouts in the event of any of these listed events will provide immense relief to you and your family. Some insurance plans also cover the cost of alternate accommodation in case you need to vacate your home for repairs and renovations.

Eligibility Criteria for Home Insurance

1. Home insurance can be bought by:

• Homeowners: If you are a homeowner, you can buy home insurance for your property

• Individuals renting homes: If you are a tenant, you can buy home insurance to secure valuable possessions and belonging contained within the home

• Cooperative societies: An authorised member of a cooperative society can purchase home insurance in the name of the society including common areas

2. You must be a resident of India to buy the policy.

3. The property for which the home insurance is being purchased:

• Must not be under construction

• Must not be a ‘kutcha’ house

• Must not be only a plot of land

• Must not be a shop

• Must not be a residential cum office space

4. Credit history and prior claims are also evaluated as part of the application process for home insurance. If you have a low credit score and have filed home insurance claims in the past, it may disqualify you from availing of home insurance or require you to pay higher premiums.

5. The geographic location of your home and the weather conditions surrounding the property is eligibility criteria. Proximity to the sea or a dense forest prone to cyclones or forest fires and other severe weather conditions are considered by the insurer.

6. The existing condition of your homes such as the maintenance and upkeep will determine eligibility for home insurance. The overall age of the home along with the condition of the walls, roofs, plumbing system, electrical systems, etc. are inspected before home insurance is sold to a buyer.

7. The home insurer will also look at the liability exposure of your home. The safety and surveillance around your home through existing alarms, detectors, cameras, etc. as well as compliance with safety codes in the region will influence eligibility.

Conclusion

New homeowners can look up home insurance policies online and compare quotes before buying one. Home insurance calculators can help you ball park the premiums you have to pay. Insurance companies are more than happy to provide you with the eligibility criteria and all other information, for their brand of home insurance. It is best to shop around for an insurance plan that suits your needs before finalising one.