What You Should Know About Home Insurance in India?

It takes so much effort to find the house you wish to purchase, get all the legal procedures done, set up a home that you would love to get back to wherever on earth you are. Won’t it be a good move if you can secure the house structure and its contents from any odds that may happen without your control?

You wouldn’t want to suffer all kinds of losses if something or the other goes wrong, would you? How to secure your house? Well, home insurance is designed for just that!

What is home insurance?

Home insurance is designed to cover the damages suffered by your home, its contents, or both. If the damage is caused due to any event listed by the insurance policy, the insurance company will pay you for the loss.

You should know that home insurance comes in many variants to suit the coverage needs of homeowners from different localities and backgrounds. The premiums can be affordable. The policy will have a coverage period of one year; after which you can renew the policy. The coverage amount for such insurance depends on the value of the asset insured.

Types of House Insurance

  • House structure insurance:
    This insurance policy covers the structure of the house, such as roofs, walls, and floors from damages incurred due to man-made and natural calamities.
  • Contents insurance:
    This insurance policy only covers the contents of the house and not the house itself against damage or loss. The house’s contents mean home appliances, furniture, fixtures, jewellery, and other valuable items in the house. Tenants who fear the damage of house contents due to damage to the house can avail this insurance.
  • Comprehensive insurance:
    This insurance is a combination of the first two insurance types where both the structure and contents of the house is covered from loss or damage due to man-made and natural calamities.
  • Tenant’s insurance:
    This insurance is designed for tenants who live in rented houses. It covers the contents of a rented house.
  • Fire and other perils insurance:
    This insurance type protects your house from fire damage and loss/damage from other perils and is called fire insurance. A fire caused due to lightning, aircraft damage, explosion, natural disaster, landslide, and other triggers are covered.
  • Burglary insurance:
    This insurance type covers the burglary of assets, such as goods owned, cash, valuables, or securities kept in the safe box or cash box in a house. Loss/damage to the property due to burglary, damage to the house premises, armed robbery, and forced and violent entry are covered under this insurance.
  • All-risk insurance:
    All-risk insurance is a type of insurance that generally covers jewellery, portable equipment, and other assets. It covers damage or loss due to electrical or mechanical breakdown, depreciation, wears and tear, scratches and dents, and other similar events.

 

What all are covered?

The damages caused to a house due to the following list of events are generally covered under home insurance:

  • Fire
  • Natural disasters, such as earthquakes, lightning, floods, cyclones, and storms
  • Explosion or implosion
  • Burglary and theft of the contents of the home
  • Bursting of water tanks or overflowing of pipes
  • Landslides, road slides or subsidence
  • Bush fire

What is covered at an additional cost?

While some events are covered by default under the home insurance policy, another set of circumstances are covered under additional cost. They are:

  • Loss of rent
  • Rent for alternate accommodation when your house is damaged
  • Replacement cost of lock and key
  • Property value increase due to inflation
  • Damage due to terrorism acts

Why should you buy home insurance?

If you are still unsure if you have to buy home insurance or not, here are a few reasons that will list out the benefits of such an insurance policy:

  • Home insurance will give you a sense of financial security, even if your house and/or its contents are damaged/lost.
  • In the case of damage/loss, the insurer will pay you for your loss. You can use the funds to rebuild your house or replace the contents damaged without taking all the burden on yourself.
  • You can avail the insurance at low premiums without having to worry about the expenditure.

Do you have house insurance yet? How do you feel about buying one?

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in

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