Planning to buy home insurance? Check these things before going for it
In its simplest version, home insurance policy covers the building along with its contents against the act of nature, fire & burglary, etc. The house owners should be careful about exclusions & inclusions in the policy papers.
If health and term top the insurance priority list, securing your home is equally important.
Home is one of the most significant financial and emotional investment in our lives & any kind of damages, like a natural calamity to theft, can lead to huge losses and burn a big hole in the pocket said, Amar Joshi, Chief Business Officer, SBI General Insurance.
Hence, it’s wise to buy comprehensive home insurance that can insure the home building structure as well as belongings & valuables.
Today, most insurance companies offer comprehensive home insurance, but what do such plans include?
Covering home with a comprehensive home insurance policy can safeguard us from a number of perils including fire lightening & earthquake & storm, riot, landslide, flood & inundation.
Coverage for terrorism, breakdown of domestic appliance & portable equipment, theft and burglary, safe deposits in bank, accidental coverage for family.
Compensation for domestic help & coverage for pet dog are some of the covers that can be opted from a wide list of add-on covers, informed Dr. Shreeraj Deshpande, Chief Operating Officer, Future Generali India Insurance.
Even cover for loss of rent & cost of alternative accommodation incurred because of loss are available. This will enable you to be independent & recover without stressing about the expenses.”
Echoing similar thoughts, Rakesh Jain, CEO, Reliance General Insurance Company Limited. A comprehensive home insurance policy can mitigate the risks that individuals face with such disasters.
Cover costs related to such increasingly common shocks. It also gives you peace of mind.”
Now, as much as buying home insurance is extremely essential, there are a few things that you need to be mindful of before making a purchase.
Renu Maheshwari, CEO and principal adviser, Finscholarz Wealth Managers said, in its simplest version. The householder’s policy covers the building along with its contents against the act of nature, fire, burglary.
There are exclusions such as war or nuclear explosion. The house owners should be careful about exclusions & inclusions in the policy.
Moreover, Maheshwari points out, for a household insurance policy in India, the options differ from one insurance provider to another. You should choose the options that are relevant to you & can also add more.
Although the policy protects against burglary, few insurance providers exclude cash. Also, jewelry claims need proof of purchase or any other proof.
Care should be taken to take a cover for replacement value rather than the market value of the asset. For example, the value of an apartment will include the value of UDS (undivided share of land ) & the construction cost.
Also, look for appropriate optional covers such as temporary living expenses.
Typically, a home insurance policy will cover natural calamities like earthquake, flood, cyclone, fire, & will cover man-made incidents like robbery, dacoity, riots, etc.
Home insurance policies offered by general insurance companies cover both building and content. Under the building cover, one can claim the cost of repairing the damage in the structure of the building.
The content insurance will include jewellery, electronic goods, clothing & furniture.
A house insurance also comes with liability coverage which covers the policyholder against personal injuries & property damage by third parties.
General insurers offer various types of home insurance covers. An individual can even buy and renew a home cover online without any documentation.
Physical inspection of property & unless someone is opting for a higher sum assured
Many a times, banks and housing finance companies bundle home insurance along with the home loan. All home insurance policies offer coverage to contents in the house against earthquake, flood, cyclone, landslide, fire, etc.
Some insurers also offer holiday home protection policies which are short-term covers for the time when one is on vacation.
It is better to opt for a longer cover which will save the hassle of renewing it every year, & one can get discounts on the total premium.
For those staying in multi-storeyed apartments & the housing society must insure the structure against natural calamities as it will help in case of any damage to the physical structure.
The cover will take care of the construction cost of the building. People living in individual houses can opt for structure home insurance.
Read the fine print
Home insurance policy as insurers have their process to evaluate the loss caused in such situations. The policy document mentions all the exclusions from the cover.
The insurers print certain conditions under which the expected claims are excluded and policyholders should be very careful while buying a policy & while filing claims.
If they are not satisfied with the assessment of loss made by the insurer & then they must insist that the insurance company review the assessment before signing the discharge voucher for settlement of claims.
Most importantly, choose the right sum insured after assessing all your contents. An under-insured cover will not be of much help & you have to bear the financial burden yourself in case of any calamity.
Also, look at add on covers by paying an extra premium. It will not only enhance the cover for your home, but also help in a hassle-free claim.
The premium for the house covered for `50 lakh and contents for `10 lakh will be around `3,000 a year. So, a home insurance provides great financial hedging at a nominal cost.