The flood that recently struck Kerala has been regarded as one of the worst ones to have hit the coast in nearly a century. It destroyed thousands of homes leaving scores of people displaced. If there’s one lesson to learn from this calamity it is this—you can never be too careful about insuring your property, especially when your family’s lives are at stake. So it’s an absolute must to shield your home and assets so that you can restrict your losses if and when you find yourself in a similar situation.
The best way to get the job done is with a home insurance policy. Be it natural calamities or man-made terrors, it acts as a security blanket, helping you make good in case you’re faced with damages of any kind.
What Is A Home Insurance Policy?
A home insurance policy gives you the financial resources you need to mitigate any damage that your home faces. This could be harm due to a host of natural situations such as floods, earthquakes, hurricanes and landslides, as well as manmade ones like terrorist attacks, theft or burglary.
But, buying property insurance does not mean buying a cover that is equivalent to the price of your home. The maximum coverage is decided keeping in mind the cost of land based on the location of your property, and the cost of reconstruction. You may also would be asked to specify the value of contents and jewellery while calculating the coverage so that they are covered too. For instance, if you own a 1,500 sq. ft. home in a metro city like Mumbai, whose net worth is between Rs.60 to Rs.70 lakh, then you will need coverage of at least Rs.30 lakh. This is because repair and renovation cost in a city like Mumbai will be Rs.2,000 per sq. ft.
How To Purchase The Best Home Insurance Policy
Once you decide to buy a home insurance policy, shift your attention towards picking the right one so that you can accrue maximum coverage. For instance, it’s in your best interest to pick a policy that insures your home as well as its contents. From Italian marble flooring to expensive fittings, art and appliances, you must pick a policy that will comprehensively restore your home to its former glory if need be. Some insurers also extend a personal accident cover to you and your family. Make use of this as it helps you solidify your defence further.
Additionally, look at the claim settlement ratio of the insurer as well as the claim processing speed and procedure. This will give you an insight into whether the insurer you have in mind is putting your interests first.
How To Strengthen A Home Insurance Policy
By choosing add-on covers you can fortify and customise your policy to cater your unique needs and priorities. For example, if you travel often considering spending an extra amount for worldwide cover. With this you will be able to claim damages or recover losses when you travel to another country with certain belongings such as your professional camera or laptop.
How To Raise A Claim On Your Home Insurance Policy?
When you are making a claim, you will have to intimate the insurer within a fixed timeframe, usually up to 15 days after the incident has occurred. It is likely that you will have to submit a first-hand account about the incident, a copy of an FIR or the fire department’s report (if necessary), along with the claim form.
The insurer will then assess the damage in person and sanction your claim. So, it is in your best interests to start repair work once the insurer has completed this step. Otherwise you may not get the entire amount, your claim may be rejected and it may be suspected that you’re trying to commit insurance fraud.
What Are Things You Should Keep In Mind When You Buy Insurance?
Buy Multi-year Cover
It is better to invest in multi-year home insurance as it will keep you protected for a longer period and you won’t have to pay premiums every year. However, owing to inflation the cost of repairs is bound to rise with time. So, keep a watch on this and increase the premium and coverage accordingly. This will ensure your coverage is in line with the rate of inflation.
Don’t Neglect The Fine-print:
Check the insurance documents carefully when evaluating policies. You are legally bound by the terms and conditions, so it is imperative that you understand the stipulations of the home insurance document. If you can’t make sense of it, it’s best to ask your financial expert and/or lawyer to read through to establish that it is indeed a standard home insurance document.
Keep these home insurance pointers in mind and buy a policy that assures you the most comprehensive protection for your property so that you can stay safe even if calamity strikes.
The writer is CEO, BankBazaar.
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