HOME – This is one word which acts as a synonym for relief, comfort, love, memories, family,asset and many more emotions associated with it.
This is one place which we always want to protect and keep it safe. Any harm to our home will shatter us emotionally and importantly financially. But still, the number of home insurance policies are rare with the insurers and the penetration for home insurance is low and neglected. We may not be capable to eradicate any risk to our home which may cause financial losses, but certainly we can mitigate it with a home insurance policy.
Reasons why should consider buying a Home Insurance:
To ensure a cover against Natural Disasters:
In the recent past, we have witnessed some instances of severe natural disasters, to quote like Nepal earthquake, Chennai floods, Kedarnath tragedy and some others. Such natural disasters and calamities can happen anywhere , anytime without prior adequate notice. Home Insurance offers you financial security in such scenarios and will ensure you a financial compensation to combat the destruction caused to your home as per the policy conditions.
To avert losses due to Man Made Risks:
Irrespective of the safety equipments that we use to protect our homes, there is always an element of man made risk which can cause harm to the home and its valuables like theft, fire, burglary,riots, terrorism, etc. The basic home insurance policy may not cover all of these but certainly some of it can be added as an additional benefit to your policy.
To protect the valuable contents in your home:
Apart from insuring the structure of the home, the valuable contents like electrical appliances, furniture, jewelry, a piece of art, gems and stones, etc. can also be insured as these items are worth a huge amount of money.
Additional benefits to get additional coverage:
Apart from the basic policy coverage, you can take additional benefits like loss of rent, third party liability cover,accident cover, burglary cover,pet insurance,etc. by paying additional premiums to enhance the home insurance policy coverage as per your need and requirement.
What a standard Home Insurance Policy Offers?
The standard or simple home insurance policy offers a financial coverage for your home against natural calamities and man made risks. The home/property insurance policy falls under non life segment of insurance and is offered by all general insurance companies excluding stand alone health insurers. The policy can have coverage for:
- The structure of the house (excluding land cost)
- And/Or the Contents of the house such as jewellery,electronic appliances, furniture , etc.
- Additional riders/add-ons like loss of rent, third party liability cover, accident cover, burglary cover, pet insurance, etc.
How the Sum Insured for the Home Insurance Policy is Calculated?
There are multiple ways to reach out to the exact value of the sum insured which can be determined based on:
(SI) based on
|SI = Total square feet area of the apartment/house x cost per square feet|
|2||Resinstatement Value / Cost of reconstruction||SI=Total square feet area of the apartment/house x Cost of construction as on date of proposal|
|SI=Reinstatement value less depreciation|
How the Premium is determined for Home InsurancePolicy ?
The following factors will impact he premium amount of your home insurance policy:
- Type of Property: Is the property to be insured is an apartment/Flat/independent Building?
- Property Ownership: Is it a rented property or an owned property for the policyholder?
- Policy Coverage: Is the structure is only insured or /and the contents are insured too?
- Add on Covers: Are you opting for some additional covers for policy coverage enhancement?
- Property Details: Age, location, size, type of the property to be insured
- Amount of Excess: The amount which you will contribute out of the total claim amount. More the excess amount, lesser will be the premium and vice versa
Key takeaways regarding Home Insurance Policy:
- It is imperative to read the fine print of the policy. Check thoroughly the policy inclusions and exclusions.
- Analyze the sum insured of your policy as with time as the cost of construction rises with the passage of time.
- Opt for a longer policy term as it will offer you attractive discounts.
- Compare and analyze the premium quotes and policies offered by various insurers .
- Don’t simply go by a home insurance policy offering the lowest premium, it is important to check the policy coverage as well.
- Opt for riders as per your need and requirement to enhance policy coverage.