Home is where your heart is! And just as you your heart needs care, so does your home. A home insurance cover helps to protect not just your home from damages but also the essentials in the house. Then why shouldn t you insure it? And, with the recent spate of natural calamities wreaking havoc in parts of the country, owners should start considering home insurance as a necessity and not a formality.
Home insurance cover acts as an essential protection against risks from financial damages caused by natural calamities such as fire, floods, earthquakes, landslides and risks involving loss of personal property caused by burglary/ theft, riots, strikes etc. Certain policies also cover household items like furniture, air conditioner, refrigerator, television, clothes, and jewellery.
A comprehensive home insurance policy covers the assets/ belongings/ contents in the house, whereas there are policies which cover only the house. Besides, most insurers offer customized plans befitting policyholder s needs and budget.
Key points one should keep in mind while opting for home insurance:
It is calculated by multiplying the built-up area of your home with the construction rate per square foot. Construction cost depends on the type of construction of the building and can easily be obtained through the builder, architect or local engineer.
Premium costs depend on a wide range of factors, such as the type of cover required. If the cover is opted for structure and the contents of the house against fire and allied perils such as natural disasters, then the premium may not be too high.
Major Risks Covered Under Home Insurance
Fire insurance covers the building and the contents against 12 perils, including storm, tempest, inundation and floods. There are two types of adequate covers available in the market which insure the structure that makes the building and another is the contents of the house. There are policies which also cover a combination of both. Cover is provided against fire, fitting and fixtures. Fragile items like lamps, chandeliers and items of similar nature can be secured along with some white goods. In case your home has been rendered uninhabitable due to fire, home insurance covers the cost of packing and transportation (up to specified limits) of your household goods to an alternate accommodation.
Certain policies may also cover against legal or medical liabilities arising out of injury to house helps or any third party.
A policyholder needs to buy add-on covers against natural calamities such as flood, lightning and storm. These add-ons incur a surge in the policy premium value providing comprehensive coverage to the house.
Burglary & Theft
A major saver to cover the contents of your house in the event of forced break-ins. Any resultant damage to one s house subject to a maximum payment of 10% of the benefit sum insured or Rs 5,000, whichever is less.
Not all insurance companies provide cover against acts of terrorism or explosions. The cover is offered in add-ons along with comprehensive policy.
Exclusions of Home Insurance Policy
Due diligence is advised to understand the fine print and exclusions of the policy before investing in. For instance, home insurance policy will not cover any structural defect or damage leading to the building collapse, negligence, poor maintenance, latent defects, damages arising out of intentional or inexplicable reasons, regular wear and tear of building structure, corrosion and damages caused while undergoing home repairs.
In the event of any actual damage, a home insurance policy always comes to your rescue. So, be prudent and safeguard your most valuable asset, your home, with a comprehensive coverage plan from a reputed insurer without compromising on coverage quality.
(By Parag Ved, Executive Vice President & Head, Consumer Lines, TATA AIG General Insurance Co Ltd)