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Home insurance – A necessity in current times?

Published on 24th Aug 2020 EST Read time 4 Mins

Your house and its contents both are valuable for you. If any damage occurs to your house either due to natural or man-made factors, then you would have to incur a huge amount of financial loss. So, it's wiser to take some important financial decisions in the form of home insurance and prevent larger financial setbacks in the future.

To safeguard your property, you might have installed sophisticated electronic alarms, fire extinguishers and might have appointed domestic help carefully. However, even with the best protective measures, the risk of damage and theft cannot be ruled out. Moreover, the frequent occurrences of natural calamities like earthquakes, floods, typhoons, etc. in the current times have only increased the vulnerability of homes to extreme damages. 

This is why it has become critical for a homeowner today to buy a home insurance policy . Home insurance or homeowner's insurance provides cover for the damages caused to your home. In general, the home insurance policy would consist of two parts i.e. one which covers the contents of your home and the other which provides cover for the structure. You can purchase either one of the covers or purchase both, which is termed as comprehensive cover.

So, home insurance is one of the concrete steps, which you can take to cover any potential risks to your property.

Why you must have a home insurance policy?

Let us find out the major reasons as to why you must have a home insurance policy.

  • To safeguard the structure
    • It is difficult to predict when the next earthquake will hit your city, but what you can control is how prepared are you to manage the damage to your home. While ensuring that the structure adheres to construction norms is important, however, definitely not enough. By buying a home insurance policy, you would be able to protect yourself from any financial losses incurred due to property damage from these calamities.

    • Most home insurance policies would provide cover for the reconstruction cost of your house only and not the market value. The reconstruction value is based on the built-up area and the rate of construction as specified by your insurance provider. This value would depend upon the location of your property and its construction type. The actual value would be different for different locations due to the difference in the cost of construction.

    • However, some insurance policies like HDFC ERGOs Home Shield policy provide structure coverage on reasonable market value oran agreed value, thereby covering the actual value of the house.

  • To protect your valuable belongings
    • Your home is not just the walls, the floor, and the ceiling. It is also characterized by your family's valuable belongings. These valuables can be many items such as electronic equipment, furniture, jewellery, etc.

    • You must protect these valuable belongings from theft, burglary, and even calamities like earthquakes.

    • Home insurance would provide cover for these valuable belongings. You would have to disclose the total value of your belongings to your insurance provider. If you are a tenant, you can ensure the contents of the house in which you are living.

    • Insurance providers would usually settle the cost of your lost item after the deduction of appropriate deduction calculated based on the age of the item.

  • To provide temporary living expenses
    • On occurrence of a calamity your home structure may require, repairs and maintenances. Sometimes, to repair the damages you might have to vacate the house along with your family for a short duration of time.

    • There are many home insurance plans, which help in providing cover for temporary expenses incurred during movement to an alternative accomodation. The cover is, however, based on the terms and conditions of your home insurance policy.

  • To offer protection against lawsuits
    • This is based on the type of policy you have opted for.

    • You cannot anticipate any mishap and they can occur in your house as well. There might be guests or visitors at your house who might end up being injured. In such a case, you can be sued by the person.

    • Similarly, any accident or mishap in your house like a fire can cause some damages in another person’s property. If you have a home insurance policy, it would be easier to control such situations, as you can avail of the cover for the repair of damages or medical treatment of the third party person/property.

  • To be free of worries
    • You might be the owner of a small apartment, a very large villa, or a tenant, once you have purchased a home insurance policy; you can feel safe that in the event of any mishap your insurance will cover your losses.

Home insurance policy is not expensive

There might be times when you would feel that home insurance policy is an unwanted expense and you should not spend on it. However, the benefits, which you can avail of by the home insurance policy are much more than the expenditure incurred for the policy. Suppose, you have a comprehensive home insurance policy with a sum insured of Rs. 40 lakhs and your annual premium is ₹ 5,000. With this nominal premium rate, it can be said that a home insurance policy is not expensive.

Conclusion

So, now when you are aware as to why getting your house insured is so important today, you must step ahead and buy a home insurance policy soon. Buy HDFC ERGO home insurance policy and provide long term cover to your property.

This blog is written by Deepika Mathur, CEO Markel, Veteran in Insurance Industry

Expert Opinion

Deepika Mathur highly recommends opting for Home Shield Insurance to ensure your dream home is protected always! She also recommends tenants to opt for Home Shield Insurance to cover their valuable home belongings like portable electronics and furniture.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales. UIN Home Shield Insurance - IRDAN125P0001V01201718 UID No. D2HO873


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