Home Insurance – Basics You Must Know

Unlike car and life insurance, home insurance in India is a relatively new concept among majority of people in India especially Tier 2 and Tier 3 cities. But with majority of homes now being purchased on a mortgaged loan from banks, the buyers are increasingly being made aware about the benefits of taking house insurance and home appliance insurance (household articles) along with the loan. In some cases banks are refusing to offer loans without a home insurance policy to safeguard their interest in worst circumstances.

So what is a Home Insurance?

In simple terms, it is a protection against named damages to the house. Just like a car is insured to protect the owner from incurring expenses in case of road accidents, a home is insured to protect the owner from incurring expenses from accidents or emergencies such as fire, cyclones etc.

What is the amount covered by the home insurance policy?

The insurance policy takes into consideration the cost of rebuilding the house/apartment/flat while the valuables in your house are insured based on the current market value.

How to claim your insurance?

The process is simple and similar to car insurance. The first step in claiming insurance against damages to your house is to call your insurance provider (helpline or agent) and explain the incident. The insurance company will send their representatives to your house for inspection and you will be required to submit relevant documents. Once verified and admissible loss, claims processed and disbursed.

Exclusions?

One must read all the terms and conditions of the policy before selecting one as each policy has a set of exclusions. These exclusions will depend on the type of insurance policy you are purchasing and will vary from one insurance provider to another and one kind of policy to another.

Is Home Insurance Policy expensive to purchase?

It might appear like an unnecessary and unwanted expense, but the benefits of having your home and its content insured far outweigh the cost of buying one. An INR 25 lakhs home / flat can be insured for as little as INR 1500 per year. Additionally, a comprehensive policy, covering even the contents of the house, can be bought for less than INR 4,000 per year. At such nominal rates, it’s quite inexpensive to get your home insured.

What happens to the Policy if the House is sold?

In case the house is sold, then the owner of the house needs to inform the insurance company and get the policy cancelled.

Is land covered under Insurance Policy?

A home insurance policy is valid only for the building / flat and household contents such as appliances, furniture & fittings.  It does not cover the land.

Can Tenants buy an Insurance Policy?

Yes Tenants can buy a household article insurance which covers the content of the house they are living in.

Imp: Maintain proof of all your insured items in order to claim them when required.