Almost
everyone is concerned about protecting their valuables like a car,
personal belongings, etc. against theft robbery and natural
calamities and buy different policies for the same. But on an
average, home insurance policies are the most purchased ones in
India. Such a policy not only safeguards your property in
out-of-the-blue situations but also ensures the safety of your
valuables. If you are a newbie at this and are still unclear about
what a home insurance policy is, what it covers for and what it does
not, here are a few points that will help you get all the details
about it:
Home
insurance: the introduction
A
home insurance offers financial protection to the property structure
and the contents of your house. This policy will cover the cost of
repairing the damage caused to your property and to its belongings.
You can buy a home insurance that covers either the property
structure or the belongings or both, depending upon your needs. Let's
suppose if you have a property of your own, you must get a home
insurance that offer cover for both the property structure and the
property content, whereas if you stay in a rented house, you must
purchase a home insurance plan that solely covers the property
content.
What
does the home insurance policy covers?
A
home insurance is offered in different premiums, prices, and coverage
which is typically based on your property size, type of construction,
geographical area, the valuables and jewels inside your home. This
policy typically covers for rebuilding/renovating the cost of
structure rather than the market value of the property. Also, the
sum insured for your property under this policy is obtained as per
the build-up area and the construction cost per square feet.
Moreover, if you have a basement floor in your house or if your
property is situated in the flood prone area, you will have to pay
higher premiums for the policy as it has more risk of getting
damaged.
Moving
on to covering the content of your home, you will have to
specifically ask for the content cover while purchasing a policy.
This part of the home insurance basically covers the damages occurred
from fire, storm, theft, flood, explosion, riots, terrorism,
earthquakes and other natural calamities. However, you must remember
that any damage done to the property due to property abandonment,
prohibitions mentioned in the policy, damage to the land that is not
a part of the structure, collectibles will not be covered under the
home insurance policy. Also note that earthquake coverage will not be
acquirable for a single apartment and a theft cover cannot be
utilized if the property was unoccupied for more than 30 days or if
the domestic help is involved in the felony.
Now
that you are clear about what the policy covers for and what for not,
you can buy an appropriate home insurance cover.
Always buy the policy based on the amounts of coverage for your home
or its contents. If possible purchase a long term home insurance from HDFC ERGO say
for 10 years at least. This way you will not only be freed from
renewing the policy often but will also get good discounts on
premiums. In case of an extended valuation of a property (due to the
increased construction rates), you should also consider renewing the
sum insured.
