Home Insurance: Home insurance has now become a necessity in view of the incidence of natural disasters such as floods, earthquakes and landslides. This insurance protects the house and the items inside from damage caused by natural disasters. Know why taking home insurance is a wise step and how much it costs.
Home Insurance policy: Nowadays, the weather in India has become as irregular as it is dangerous. Sometimes there are floods, sometimes earthquakes, and sometimes landslides. In such a situation, home insurance is no longer a hobby, it has become a necessity.
Why is home insurance necessary?
Most of us think that nothing will happen to us, but the reality is that disaster never comes with any warning. If suddenly there is a crack in the house, the roof collapses or all the things get damaged due to water, then the loss can be in lakhs. In such a situation, home insurance protects you from that financial shock.
What is covered in home insurance? (What Does Home Insurance Cover?)
Home insurance is to protect your house and the things kept in it from any major damage. According to a report by Livemint, if your house is damaged by natural disasters like storm, cyclone, tempest, tsunami, flood, lightning, earthquake, forest fire, then the insurance company compensates you for it. Apart from this, if your house is damaged in a riot or strike, if someone deliberately vandalizes it, if there is a terrorist attack or if there is any damage during missile testing, then all these are covered in home insurance. The insurance also covers damage caused by incidents like sudden bursting or leakage of water from a water tank, pipe or any machine.
Apart from this, if the ground beneath your house subsides, or there is damage due to landslide or rockslide, then you can also get a claim for that. If a vehicle collides with your house, a tree falls, a part of an airplane or a wall falls on the house, the insurance also covers the damage caused by any such external collision.
Another important thing is that if there is any theft in your house within 7 days of the above-mentioned accidents (such as flood, fire, earthquake etc.), then that too comes under the scope of insurance but this happens with a condition.
What is not covered? (Home insurance does not cover these)
Home insurance covers many types of major losses, but there are some things which are not included in this insurance. According to the report of Livemint, if the house is damaged due to any war, foreign attack, or action of an enemy country, then the insurance company does not compensate for it. Similarly, if any damage is caused to the house due to ionising radiation or radiation, then that is also not covered. Apart from this, damage caused by pollution or dirt, short circuit, self-heating of electricity, or leakage of electricity from anywhere, even if it is caused by lightning, any such damage is not included in the insurance.
If your income stops due to an accident, or any work is completed late, then there is no claim for that loss. Similarly, if the market value of your house decreases due to any reason, then that too is not covered under insurance.
If you do any paperwork, report or spend money (such as lawyer’s fee, surveyor’s fee etc.) to claim insurance, then the insurance company does not pay for that either.
Two types of home insurance
Home insurance can usually be taken for a period of 1 year to 20 years. There are two types of it. The first is structure insurance under which the building of the house i.e. structure like walls, roof, windows, doors are covered. The second is content insurance in which the items inside the house like furniture, TV, fridge, cupboard etc. are covered. Both can also be covered together in insurance, for which if you want, you can take a comprehensive plan which covers both.
Who can take this insurance?
People whose house is not older than 50 years can take this insurance. Flat, apartment, row house or bungalow all come under the purview of this insurance. Tenants can also get the contents inside the house insured.
How much does it cost?
A basic comprehensive home insurance costs ₹3,000 – ₹5,000 per year. In this premium, you can get a cover of around ₹20 lakh. Some companies like HDFC ERGO cover building up to ₹10 crore and contents up to ₹25 lakh.
How is the insurance amount decided?
- The insurance amount is decided based on two factors.
- What is the carpet area?
- What is the construction cost?
- As soon as these are estimated, the insurance amount is decided accordingly.
What should be included in a good insurance?
The sum insured should be enough to rebuild the house even if it is completely damaged. There should be 360 degree protection for both the structure and the contents. Whether it is fire, water leakage, theft or any other accident, choose a plan that covers all.
Disasters do not come with any prior notice, and when they come, not only the walls but also the hard work of years goes to waste. In a country like India, where floods, earthquakes or storms wreak havoc every year, leaving the house without insurance is like going out without an umbrella during the rainy season.
People often think that we will see when it happens, but alas, at that time it is only to be seen. So take home insurance by paying a small premium and strengthen the foundation of the house.
