Your home is your heaven insure it with the best Home Insurance Plan Your home is more than just a building; it’s a place filled with memories, belongings, and a sense of security. However, unforeseen events such as natural disasters
theft, or accidents can pose a risk to your home and its contents. This is where home insurance comes into play. In this comprehensive guide, we will explore the world of home insurance, its benefits, coverage options, and essential factors to consider when selecting the right plan for your needs.
What is Home Insurance?
Home insurance, also known as homeowner’s insurance or property insurance, is a financial safeguard that protects your home and its contents against various risks. It provides coverage for structural damage, loss or damage of personal belongings, liability for injuries or damage to others, and additional living expenses in case you are temporarily displaced from your home.
Some of the most common potential risks are:
- Natural calamities like lightning, hail, fire, Tsunami, etc.
- Destructions due to manmade problems like theft, vandalism, or due to property destruction.
- Damage occurs due to rail or road construction
- Explosion or smoke
- Interior damage costs
- Exterior damage expenses
- Loss/damage of personal assets/belongings from a house
- Coverage for physical injuries that may occur while on the damaged property
Benefits of Purchasing Home Insurance Plan
Protection against Property Damage and Loss:
If your home suffers from structural damage due to these perils, your insurance policy will cover the repair or rebuilding costs, ensuring that your investment is protected.
Coverage for Personal Belongings:
Home insurance not only protects your home but also covers the loss or damage of personal belongings. This includes furniture, appliances, electronics, clothing, jewelry, and other valuable items. In case of theft, fire, or other covered events, your insurance policy will reimburse you for the value of the lost or damaged items, allowing you to replace them without significant financial burden.
Liability Protection:
Home insurance includes liability coverage, which protects you from legal and financial liabilities in case someone gets injured on your property or if you accidentally damage someone else’s property.
Financial Security and Peace of Mind:
Knowing that you have insurance coverage in place to protect your most significant investment and your personal belongings provides a sense of security. It allows you to focus on enjoying your home and living worry-free, knowing that you have a safety net in case of unexpected events.
Affordable Premiums:
Home insurance premiums in India are typically affordable, considering the level of coverage and protection they offer. The cost of home insurance is influenced by factors such as the value of your home, its location, construction type, security measures in place, and the coverage limits you choose. By comparing different insurance providers and policies, you can find a plan that suits your budget while providing adequate coverage.
Exclusions in Home Insurance Plan
- Any damage or loss occurs to the property due to wear and tear depreciation.
- Damage or property loss due to wars, invasions, nuclear attacks, acts of foreign enemies, etc.
- Damage or loss to the property due to running of electric equipment in the wrong way.
- Cash loss at home due to burglary or theft.
- Damages happened due to animals that you keep at home.
- Damages incurred by running a home business from your property.
- Damage due to negligent use of any household equipment.
- Damage to under-construction property.
- Any damage occurred to a property that is unoccupied for over 90 days.
Types of Home Insurance Policies in India
Here is the list of all the types of Home Insurance policies that are operational in India:
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Standard Fire and Specials Perils Policy
It is one of the basic or you can say standard home insurance plans designed to offer protection to the home against fire and other special perils. Be it homeowners or property owners, anyone can purchase this plan and financially protect household goods and other possessions. The sum assured in the Standard fire and special perils policy is determined by the cost incurred for the reconstruction of the building.
The coverage included in the Standard Fire and Special Perils Policy are:
- Natural Calamities like earthquakes, cyclones, forest fires, volcanic eruptions, lightning, fire, etc.
- Any damages incurred on the home due to explosion or any kind of man-made disasters like malicious content, strikes, communal clashes, etc.
- Damages to the property due to overflowing water tanks, or bursting of plumbing pipes.
- Property destruction due to rockslides or landslides.
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Home Structure Insurance
Home structure or building insurance offers financial insurance to your home structure from all types of risks and damages. Protects your home from inside and outside starting from your kitchen and bathroom fittings to your garage, gardening shed to motor shed, etc.
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Public Liability Coverage
If any guest or third person suffers from an injury inside your home, then you can claim compensation under public liability coverage as a part of your home insurance plan.
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Personal Accident
It is an extended home insurance policy that financially protects you and your family member from an accident in the insured home. Covers for permanent and in case of death disability.
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Theft and Burglary insurance
As the name implies, one can claim compensation for damages taken place in your insured home due to theft or burglary.
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Contents insurance
It is a home insurance plan that offers protection to home as well as all the contents inside it. It covers content mainly household appliances, washing machines, documents, refrigerator, TV, or any other goods at home. This plan restores your entire home and its interiors.
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Tenants Insurance
If a tenant buys tenant insurance coverage as a part of a home insurance plan. The focus will be mainly on protecting the contents and the goods inside the home. It helps the renters also in protecting appliances and other goods through this coverage.
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Landlord Insurance
This insurance plan covers mainly the rent loss, third-party liabilities, and overall hampering of building structure. However, it excludes loss of property due to war, wear and tear, willful destruction, no one has occupied from a certain period.
Factors that determine your Home or Property Insurance Premium
As you can see, apart from the property size, other factors that determine the home insurance premium are the construction costs and location, all contribute an equal role in calculating the cost of the property. This means no two houses will be eligible for the same insurance amount as there are several factors at play.
- Required Coverage
The more coverage the higher the premium will be. While buying a home insurance plan, you will come across varying coverage options. Some plans will be offering coverage only for house structure while some are offering coverage for the content of the house. Depending on the coverage you choose, the premium for your plan will be determined.
- Construction Cost
The policy premium and sum insured of a small home are always lower than the sum assured and policy premium of a bigger home.
The Process to Make Home Insurance Claims
When you are filing a home insurance claim, do not miss out on any details. To make it easier for you, we have explained the process of the Home insurance policy claim.
- The first and foremost step is informing the insurance company about the damage or losses that occurred to your home by calling on their 24×7 toll-free number.
- Share all the relevant and necessary information like policy number with the insurance company.
- Post you shared the information; the customer service personnel will initiate the insurance claim process.
- Will process your claim and send a team of surveyors to evaluate the damages.
- Post inspector the surveyor will submit the Final Survey Report.
- Once the insurer validates your claim request, the claims team approves the sum assured.
- The compensation amount credited to your bank account or issued to you via cheque.
Home Insurance Exclusions
- Destruction of property happened willfully.
- Property damage due to wear and tear.
- Loss to property due to war.
- Loss to property unoccupied for more than a certain specified period.
- Money in the form of cash, antiques and collectibles.
Home Insurance Myths
Here are the top myths of home insurance and the truth behind it.
Myth 1 – My Home Insurance Plan will protect me from all unforeseen events
In India, when you take a home loan, it’s mandated to purchase home loan insurance. However, many people are unaware of the fact that home loan insurance is offering coverage to the lender, not to you as a borrower. It will financially protect the lender in case fail to pay the home loan EMIs.
Myth #2: It is enough if I take a basic home insurance plan.
Many people to get the benefit of lower premiums go with the standard home insurance plan; however, one needs to understand that the basic home insurance plan is not covering contents and damages due to flood, etc. So, always read the policy document carefully before choosing any plan.
Myth 3: Tenant does not require home insurance
It is one of the biggest myths of Home Insurance in India that being a tenant, home insurance is not required. It is necessary for a tenant to understand that a home insurance plan will cover the cost of the contents of your home like refrigerator, washing machine, furnishings, and more.
Myth 4: Home insurance covers only the structure and contents of the property.
Many homeowners had a misconception that a home insurance plan only covers the structure and the content of the house. However, it is just the basic coverage; you can add more to it like ATM withdrawal cover, temporary resettlement cover, dog insurance cover, monsoon cover, public liability cover, etc.
Myth #5: The coverage amount offered by my home insurance plan should match my home’s actual value
When you are going with the home insurance plan to match it with your property’s market value, then you are likely to pay higher premiums. Instead, opt for coverage that is equal to the cost of rebuilding your property.
Myth #6: My policy is covering termite damages
Many home insurance companies are not offering coverage for termite infestation. As they are providing you compensation for natural and fabricated calamities. Termite damages happened mainly due to lack of maintenance.
Key takeaways
In today’s unpredictable times, buying a home insurance plan has become a necessity. It will guard your property against all the unpredicted damages and losses. If you take insurance from more than one company, they can compensate you on a proportionate basis when you claim the amount. Although you can rent the insured house, if you sell the property, there is automatic cancellation of the home insurance policy.
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FAQs
What are the eligibility criteria for purchasing a home loan insurance policy?
All individuals who are property owners can buy a home insurance plan. In case, you are purchasing housing society insurance, then you must be an authorized member of the society’s managing committee
How is the value of the structure calculated?
For a home insurance policy, the value of your home structure is determined by the reconstruction cost and not the market value. For instance, a home has a total-built up area of 1200sq.ft. The current cost of construction is Rs. 1000 per sq. ft. Then the sum insured for your home’s structure is Rs. 12, 00,000.
What is the policy tenure of Home Insurance?
The policy tenure of home insurance can vary depending on the insurance provider and the specific policy you choose. In India, most home insurance policies offer coverage for a one-year period. This means that the policy is valid for one year from the date of purchase and needs to be renewed annually to maintain continuous coverage.
If the losses occurred due to a fire outbreak or any mishap in the neighborhood, can I claim the same?
Yes,Home insurance policies generally provide coverage for damages and losses caused by fire, including damage to the structure of your home and the loss or damage of personal belongings.
My wife started her home tuition business and runs the same through our house. Is my home still insured?
The answer to whether your home is still insured when running a home tuition business within it depends on the terms and conditions of your home insurance policy. Generally, standard home insurance policies are designed to cover residential properties for personal use rather than commercial activities. Therefore, running a business from your home may impact the coverage provided by your policy.
Can I sell off my property during the property insurance tenure?
Yes, you need to submit a claim for the cancellation of your home insurance policy, In this case, the premium amount deducted accordingly, the rest is refunded to you, and your home insurance policy becomes null.
How long does it take an insurer to disburse the claim?
Insurance claims are time-bound. Post submission of claim form, the insurer dispatches a surveyor for your case within 48 hours. The surveyor after analyzing the property damages submits the FSR (Final Survey Report) to the insurer.
Do items like household appliances, and jewelry are part of the Standard Fire and Special Peril Policy?
The Standard Fire and Special Perils policy does not cover compensation for the loss of contents inside the home. You have to choose add-on-covers to your standard policy or opt for other types of insurance policies that offer extended coverage.
