Nothing can be done to prevent what insurers call “acts of god”. Natural disasters like earthquakes, floods, wildfires etc. come unannounced. Man-made disasters like thefts, accidents, fires, riots, etc. can also take place without warning. You can’t always stop these events from happening, but you can protect yourself from the unpleasant financial consequences that follow in their wake by insuring your home and its valuable contents.
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Your home may be your most valuable asset, and any damage it suffers due to natural or man-made reasons can hurt you financially. Keeping your home safe is as important as actually buying your house.
Let us now take you through Home Insurance and its various aspects.
Home Insurance coverage
Home Insurance products cover the structure of the property and content inside. The structure can be covered in three ways:
- Covering the cost of construction excluding the value of the land
- Covering the cost of the construction including the value of the land
- Considering the cost of construction factoring in depreciation
The content inside can be insured in two ways:
- Buying a cover that considers the value after depreciation
- Buying a cover on a reinstatement basis
Home Insurance products typically cover losses from natural calamities such as earthquakes, lightning, floods and cyclones as well as man-made calamities such as fire, riots, violent strikes, theft and burglary. You can also opt for additional cover for jewellery, precious stones, and other valuables if lost due to theft.
Exclusions
Instances that are not usually covered under Home Insurance include losses due to normal wear and tear of the property, accidents due to improper handling of power equipment, electricity connection or electronic machines and damage caused by war.
Protection of your property and content from terrorism is not usually covered by insurance companies. However, you can opt for such coverage by purchasing add-ons.
The inclusions and exclusions are treated differently by each insurance provider, therefore you must carefully go through a policy’s features before selecting it.
Home Insurance premium
The premium on Home Insurance is determined on the basis of the type of structural and content cover you choose. The current value of the property, its location and the content can be factored in as well. You must compare premiums from various insurance firms before deciding on a product.
Process of claiming
At the time of a claim, the insurer will inspect the damaged content, so make sure you have all your documents, such as your insurance papers and policy number, in place. You must also keep in mind that a few areas are open to interpretation and the insurance company might take a call on whether to pay for your loss or not.
You don’t need to be a homeowner to buy a Home Insurance policy. If you are living on rent, you can avail of household insurance to protect your contents and household articles.
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So, if you do own a home and happen to live in an area that’s prone to the risks mentioned above, you should certainly consider buying a Home Insurance policy at the earliest.