A home is one of the costliest and treasured assets earned by any individual in their life. So, why let any catastrophic devastation or other natural calamities harm the entire structure of your house? In order to save it, a Home insurance is the best option one should definitely opt for. Moreover, it is the only way through which one can save their house from any unforeseen circumstances. In India, almost all the leading banks and financial institutions offer comprehensive insurance policies. So, with this blog, we will tell our readers that why it’s important to have home insurance:
Home Insurance: What does it mean?
A Home insurance is a unique type of property insurance that covers your house with different kinds of dangers like accidents, natural disasters, and thefts etc. A person can choose to buy a home insurance plan for a specified tenure, and it will be effective only for that tenure. So, we can say that home insurance is also a type of term contract. Once the required period is over, a person can renew the insurance policy just like any other life insurance policy. However, a person may have to pay extra in order to get it covered for any earthquake damage.
Types of Home insurance
Structure Insurance – A structure cover formula is based on the area of the house and the approximate construction cost. It covers losses due to structural damages. This type of cover is useful for both homeowners (living in the house) and builders who are renting out the building to a tenant for the residential or commercial purpose.
Content Insurance – This type of insurance policy covers losses due to damage of contents within a home like appliances, furniture, and jewellery among others. It is important for a homeowner to remember that the valuation of all insured items should be disclosed to the banks or financial institutions, through bills and invoices. However, tenants can just opt for cover for just the contents.
Sum insured: How to choose?
The value of an individual’s house is based on three components: land, building and locality costs. Insurance will cover only the building cost.
Formula for sum insurance: Built-up Area x Construction Cost per Square Feet + Value of Contents after Depreciation.
Premium of Home insurance
The premium is based on the layout of the house; type of construction materials; and location of the property.
However, insuring the structure of the house and its contents is not very expensive. For example, for a sum insured of R30 lakh for the building and Rs, 5 lakh for the contents a pure fire insurance cover which covers against fire and other allied perils along with terrorism cover would come to about Rs 2,000 for a year. Pack in burglary and theft cover for a sum insured of Rs 5 lakh and the premium will be Rs 3,155. You can also add an additional cover for breakdown domestic appliances for a sum insured of Rs 4 lakh, the policy will come for about Rs 5,600 for a year.
So, if you own a house or given your house on rent then you must buy home insurance as soon as possible.
Things to keep in mind while asking for claim
So once you have taken the insurance, there are several important things which one has to keep in mind, if they are asking for a claim. For example-At, the time of a claim the insurer checks all the damaged goods and inspects them thoroughly. Therefore the person must ensure that they have made the right declaration and must have sufficient proof.
According to an insurance agency, “Insurer can refuse claim in case of subsidence building or poorly maintained building or unauthorized construction.”
Benefits of having a Home insurance policy
- It provides liability coverage which covers a person against personal injuries, property damage to guests and other third parties which they might have incurred while residing in the insured house.
- A home insurance also cover the expenses of your rental accommodation while you are rebuilding or renovating your house.
- Some banks give preference to those loan borrowers who have their home already insured. In fact for certain financiers, home insurance is one of the major eligibility criteria for availing a home loan.
So get your dream home insured today and save it from every kind of natural and man-made calamities and give yourself and your family a secured future.