It takes years of savings and going through a tedious loan application process to buy a new home. Emotionally, many of your hopes and dreams are linked to the new house. Protecting your house from various risks is a wise idea, as is getting a home insurance policy.
What is Home Insurance?
Home insurance policies protect your house and its contents from risks such as natural calamities, burglary, theft, etc. In case of an unfortunate event, the insurance company provides financial assistance of an amount up to your 'sum insured'.
Home insurance policies are designed to protect your new house and its contents from various risks. Each policy specifies the risks and the home contents that it covers. Depending on your need, you can buy add-ons to extend your cover.
Benefits of Home Insurance
Here are the advantages of having a home insurance policy.
- Protection of the House Structure: Home insurance provides financial protection to the structure of your house. The insurance company covers repairs, renovations, and other expenses for unfortunate events like fires and earthquakes.
- Safeguards the Contents of the House: Home insurance policies cover the financial losses due to damage to the contents of your house. This includes your furniture, electronic appliances, fixtures, etc.
- Additional Coverage: You can purchase add-on coverage to extend your insurance coverage. For example, you can get lock and key replacement cover, lost wallet cover, public liability cover, etc.
Types of Home Insurance
Here's a summary of the types of home insurance policies that you can get.
- Fire cover- This policy protects your home and its contents from damages caused by fire.
- Structural cover- This is a standard policy that covers the damages caused to the structure of your house.
- Home contents cover- This policy is designed to safeguard the contents of your home, such as your furniture, fixtures, electronic items, and valuables.
- Public liability cover- This policy covers the damages caused to your house or its covered contents by a third party.
- Theft cover- This policy protects the contents of your house from robbery and theft.
Inclusions of Home Insurance
A new home insurance policy can cover some financial losses during such events, depending on its coverage and the sum insured.
- Natural Calamities: Home insurance covers the damages caused by earthquakes, floods, lightning, hail, cyclones, and other natural calamities.
- Fire: The damages caused to your home and its contents due to fire breakouts are also covered under home insurance.
- Burglary and Theft: Home insurance also protects the contents of your house from risks like burglary and theft.
Exclusions of Home Insurance
Every insurance policy specifies the risks that it does not cover. Here are the most common exclusions of home insurance policies.
- Damages are caused due to natural wear and tear.
- Damages caused due to the negligence of the owner.
- Intentional damages were made to the house and its contents.
- Damages for which the owner cannot provide valid evidence.
Best Home Insurance Plans
Here are the best home insurance plans currently available in India for homeowners.
- Bajaj Allianz Home Insurance
Bajaj Allianz's 'My Home Insurance Plan' covers damages to the building and the loss or damage of portable equipment, jewelry, valuable items, etc. - Bharti Axa Home Insurance
Bharti Axa Home Insurance covers the structure of the building and its contents from damage. The plan provides pan-India protection for your jewelry and valuables. They provide personal accident cover for the whole family, including up to three pets. - Cholamandalam Home Insurance
How to Choose the Right Home Insurance Coverage?
Consider the following key factors to choose the best home insurance plan for your home.
- Identify your needs- Note the risks you wish to cover through your home insurance.
- Market Research- Explore the home insurance plans available in the market to understand the coverage, cost, inclusions, and exclusions of various policies.
- Choose a trusted insurer- Select the insurance plan provided by a trustworthy and reputed insurance provider with a good track record and claim settlement ratio.
- Choose appropriate add-ons- If you wish to extend your home insurance coverage beyond the coverage provided, you can opt for add-on policies by paying an extra cost.
How to Make a Home Insurance Claim?
Here's the step-by-step process for submitting your home insurance claim in India.
- Report Your Claim: Contact your insurance agent or provider to report your claim.
- Notify the Relevant Authorities: Inform the relevant legal authorities about the unfortunate event. For instance, you should file an FIR against any theft or burglary. If there has been a house fire, contact the fire brigade.
- Estimate the Expenses: Estimate how much you need to spend on repairs, renovation, or replacement. You need to send an estimated expenses quote to your insurance company.
- Surveyor Assessment: The insurance company would appoint a surveyor to investigate and assess the claim.
- Documents: Submit the documents required to process your claim.
- Disbursement: The insurance company will approve your claim after assessing its genuineness. After the approval, the funds will be disbursed.
Wrapping Up
Buying a new house requires significant financial and emotional investment. Although buying insurance for your new home is not legally mandated, it can be wise to protect your investment.
FAQ's
What are the exclusions of a home insurance policy?
Generally, home insurance excludes pre-existing damages, manufacturing defects in electronic items, regular maintenance expenses, and damage to the house due to rodents, moulds, termites, etc.
Is home insurance mandatory?
No, home insurance is not mandatory. You can choose whether to insure your home or not.
Can I get a deduction under Section 80C of income tax for my home insurance premium?
No, Section 80C does not cover the premium paid for a home insurance policy.
Can I buy home insurance for a rented property?
Yes, you can buy home insurance for a rented house as well.
Why is it important to have home insurance?
It is important to have home insurance because the policy provides financial support during unfortunate events like natural calamities, theft, burglary, etc.
