What is home insurance?
A home insurance policy, also called property insurance, is a policy which covers the damages suffered by your home, its contents or both. If there is any damage which is natural or man-made in nature, the policy would pay you for the loss that you incur.
Home insurance offers coverage to a house and its content from unforeseen circumstances such as damages caused by natural calamities (earthquake, fire, flood, storm, landslide, etc.) and man-made activities (theft, burglary, terrorism, riot, etc.). Be it a damage or loss to your owned apartment, luxurious bungalow or a rented flat, a home insurance policy cover your home to ensure it always stands strong to give you the shelter and protection you need. Just by taking fire precaution or putting door locks, your house isn’t safe. Choose the best home insurance plan that evaluates the value of your home structure and content to derive a pocket-friendly premium for securing your home.
Why there is a need for home Insurance in India ?
Because, natural calamities and accidental damages do not come with a prior notice, they are uninvited & uncertain. In addition, a single incident is enough to drain your savings that is why you need a home insurance plan to cover the repair costs & pay you in case your valuables are stolen. While home insurance is not mandatory in India, depending upon the risk factors you may think of getting a home insurance plan. In India, many regions are prone to natural calamities like flood, earthquake and cyclones hence it is important to get a home insurance in India. Also, even if you are sure that your home is not prone to natural calamities, do not forget that fire incidents and theft/burglary may happen at any place at any time. House insurance or property insurance plays a vital role in covering your most valuable asset, because mere buying the dream home is not enough protecting it matters a lot.
Features of a home insurance policy
A home insurance plan has the following features –
It comes in different variants to suit the different coverage requirements of homeowners
The premiums are very low and affordable
The policy is usually issued for one year after which you can renew the plan
Coverage amount depends on the asset insured and its value
Types of home insurance plans
Home insurance in India comes in the following variants –
Structure insurance. This policy covers the structure of your house, i.e. the roofs, walls and floors against damages suffered due to natural or man-made calamities. The policy can also be called a Standard Fire and Special Perils policy as it covers the structure against fire and other natural or man-made calamities
Comprehensive insurance. This policy covers both structure and contents insurance. It covers the structure of the house as well as its contents against damages or loss due to natural or man-made conditions.
Public liability insurance. This policy covers any type of injury suffered by individuals when they are on your property or if your property causes damage to another individual’s property. In such cases, the aggrieved third party might raise a financial liability on you. This liability is covered under the policy.
Tenant’s insurance. This insurance policy is designed for tenants who are living in rented houses. The policy is like a contents insurance which covers the belongings of the tenants in the rented house.
What is covered under home insurance?
A home insurance policy covers the damages suffered due to the following instances –
Riots, strikes or any other malicious acts
Earthquakes, lightning, floods, cyclones, storms, etc.
Missile testing operations
Burglary and theft of the contents of the home
Explosion or implosion
Landslides, road slides or subsidence
Bursting of water tanks or overflowing of pipes
Leaking from automatic sprinkler systems
Additional coverage benefits under home insurance
Besides the above-mentioned coverage benefits, add-ons are also available under property insurance plans. These add-ons increase the scope of coverage of the policy and are available at an additional premium.
The most popular add-ons available with most home insurance plans include the following:
Loss of rent. If, after damage, the house property is unoccupied, the landlord faces the loss of rent for the period the home is under repairs. This add-on covers the loss of rent.
Rent for an alternate accommodation. Under this add-on the rent paid for alternate accommodation is covered when your home is damaged and you live elsewhere
Replacement of lock and key. The add-on covers the cost of replacing the lock and key of your home.
Escalation cover. Under this add-on, the increase in the value of the home due to inflation is covered.
Terrorism cover. If the plan does not cover terrorism-related damages you can choose this add-on to include such damages.
What is not covered under home insurance?
Home insurance plans do not cover the following types of damages or losses
Non-disclosure of important information in the proposal form
Pre-existing defects or damages
Damages due to war, nuclear contamination, mutiny, etc.
Losses due to pollution and contamination
Loss of jewellery, cash, precious stones, etc. unless the same is specifically covered under the plan
Deliberate damage to the property or contents
Misconduct and wilful negligence
Cost of land
Depreciation & normal wear and tear
Losses suffered when the property is not occupied for more than a specified period
Properties under construction are not covered under home insurance plans
Benefits of home insurance. Home insurance proves very beneficial due to the following reasons –
The policy gives you financial security if your house and/or its contents are damaged
The compensation paid by the home insurance policy allows you to rebuild your damaged home or replace the lost contents without feeling a pocket pinch
Since the premiums are low, you can insure your house under an optimal home insurance policy without worrying about the financial outgo