Over the past few years, there has been an increase in the number of homes being bought across the country. The property market has been pretty ripe for investments, and folks across the nation jumped at the opportunity. As an icing on the cake, most of the financial institutions offered attractive Home Loans to ease the burden of finances on home buyers too. Although there was an increase in the number of home buyers, there was hardly a handful among them who purchased Home Insurance.
Getting Home Insurance is important, especially when you buy yourself a new home because it provides the much-needed protection against calamities, burglary, theft, fire, and man-made mishaps. And wouldn’t you like that peace of mind?
If insuring one’s home provides so many benefits, you must be pondering over why the home buyers aren’t doing so. Some of the common reasons why Home Insurance is one of the most under-purchased products within India are the lack of awareness about it and the myths surrounding it.
Additional Reading: All About Home Insurance
While half of the population has no clue about Home Insurance, the ones that do know are under the impression that they’ll have to pay high premiums and will be subject to a complex documentation and claims process.
Stella D’Souza, a mid-level employee in a private firm, said, “I never knew there was a something called a Home Insurance. But, luckily, my husband knew about it. And today, we’re glad we insured our home. After all, one can never predict natural hazards, right!”
Of course, we completely agree with Stella! With the frequent climate changes and out-of-the-blue occurrences of natural calamities like the Chennai floods, cyclone Vardah, or the earthquake in North India, it has become all the more important to buy Home Insurance along with your new home. With an insurance in place, restoring damaged property from calamities won’t be a financial burden for you.
What About The Cost?
The cost attached to a Home Insurance plan depends on a number of factors. The premium you pay will depend on the sum insured. The sum insured will be dependent on the cost of construction of the property and its built-up area. The cost of construction will take into consideration the quality of construction and the materials used, and the locality in which the property stands.
A comprehensive Home Insurance policy is essential to secure your home against unforeseen events, no matter the cost. You should opt for a scheme that offers adequate coverage for your home and belongings. If you need help calculating how much coverage you’ll require for your home, there are quite a few Home Insurance calculators available online.
While deducing the sum insured, remember that it is important to value all your belongings along with your property. You’ll need to get as accurate as possible with your calculations. Wondering why? If you under-insure, the insurance company will pay only your sum insured even if the property damage cost was higher. On the other hand, if you over-insure, the insurance company will pay only the property damage cost.
For instance, let’s assume that you bought a cover of Rs. 75 lakh. On an unlikely event (which is covered), your property gets damaged and the reinstatement cost is estimated to be Rs. 35 lakh. Your insurance company will pay you only Rs. 35 lakh (and not Rs. 75 lakh).
Additional Reading: How Much Home Insurance Do I Need?
What Is Covered And What Is Not?
Most Home Insurance plans available cover two kinds of property damages:
Damage to the structure of your property – These plans cover only damage caused to the structure of the property. If you opt for this plan, you can claim the construction cost if any damage is caused to your property by any of the unlikely events mentioned in the policy document.
Damage to contents of your property – These plans offer compensation for any damage caused to the contents of your property such as the furniture, appliances, jewellery, etc. due to any of the events mentioned in the policy document.
There are quite a lot of comprehensive policies in the market that provide coverage for both kinds of damages mentioned above. However, such policies are available only for homeowners. If you’re a tenant, you can purchase insurance cover only for your belongings.
In addition to the covers mentioned above, there are a lot of add-on covers available too. Some of the common add-on covers are rent cover, terrorism cover, and burglary/theft cover. A rent cover helps you with rent expenses when you’re staying in an alternative accommodation due to repair work. A terrorism cover caters to damages caused to structure and contents of your property due to terrorist acts. And a burglary/theft cover, as the name suggests, caters to the damages caused to structure or contents due to theft or burglary.
Now let us talk about what’s not included in Home Insurance plans. Although the policy document will contain all the exclusions, here are some of the common exclusions found in Home Insurance policies:
- Any damage caused due to your negligence or any wilful damage caused to the property and its contents will not be covered
- In case you have not disclosed details or have provided wrong details about the property and its contents, the policy will not cover the same
- Any pre-existing damages to the property or its contents will not be covered by the policy
- If there are any manufacturing defects in the contents, the policy will not cover such defects
The above-listed exclusions are some of the common ones that we have come across. However, please refer to your policy’s documents to know what’s not included under the policy.
How To Make A Claim
First and foremost, you need to inform your insurance company about the destruction caused to your property or its contents. Usually, there is a time limit within which you have to file your claim, so don’t delay.
You’ll be required to fill up a claim form. Ensure that you provide correct information and include all details in the claim form. The insurance company will initiate the claim process only after they receive your claim form. Simple, isn’t it?
Why You Should Insure Your Home
Here are a few reasons why it makes sense to buy a Home Insurance policy:
Financial protection – A Home Insurance policy provides coverage against calamities, both natural and man-made, like fires, earthquakes, floods, vandalism, etc. Cyclone Vardah had left behind a trail of destruction in Chennai and those who didn’t insure their homes had to spend huge amounts to repair the damages.
Protection for contents – With Home Insurance, you can protect your personal belongings and valuables against thefts and calamities. There are many covers and add-ons available to safeguard all the contents of your property including furniture, electronics, pieces of art, etc.
Temporary expenses – In the case of any calamities, you’ll have to temporarily shift to a different residence while rebuilding or renovating your property. Home Insurance will cover the rent expenses if you temporarily shift to another apartment or house.
Here are a few tips to get yourself an effective Home Insurance policy:
Compare – Comparison shopping is something that you should do before buying anything, not just insurance policies. When it comes to Home Insurance, different policies will offer different benefits. Compare different policies and their features, and choose the one that best fits your needs.
Understand your policy thoroughly – Read your policy documents without fail. You need to know every detail about your policy to avoid surprises later.
Be in touch with your insurer – Got any queries or doubts about your Home Insurance policy? Don’t stick to your assumptions, instead get in touch with your insurer and clear them.
Buy add-on covers if necessary – There are a lot of add-ons available with Home Insurance policies. You can invest in them if necessary. For example, if you live in a neighbourhood where theft is common, you can buy an additional cover for your belongings against theft and burglary.
Amplify your policy – Certain scenarios will require you to make changes to your existing insurance policy. For example, if you plan to expand your property or buy costly interior decors for your home, you need to include these in your policy accordingly.
Raise your claims on time – There is a time limit on raising claims after an event (which is covered) has occurred. If you do not file your claim within the stipulated time, then you’ll miss out on many applicable benefits. This is why we stress on reading your policy documents thoroughly!
Now that you know the importance of a Home Insurance cover, maybe it’s time for you to get one for your home. Unfortunately, we do not offer Home Insurance as of now, but you could explore our other products.