Home Insurance

Insurance has always been a matter of utmost importance but few of us are actually aware of its significance. However, the insurance market is mainly pre-dominated with the life insurance segment and only 1% of the total insurance sales constitute home insurance.

Protecting a home is about safeguarding yourself from the loss incurred on account of its structure in case of uncertainty, thus avoiding a financial setback. With two types of policies available in the market, you need to choose a policy which is apt as per your requirements. A basic fire insurance policy covers your house against fire and other allied perils like floods, storm, riots and lightening while Comprehensive Policy has more aspects to cover your risk.

Also known as Householder’s Package Policy (HPP), Comprehensive policy covers not just the structure of house, it also facilitates the risk cover for its contents. You have a privilege to go with the content risk-cover only under this policy. Hence, it is more apt for the tenants as they have no ownership over the structure of the house. You can also insure the contents of your house against damage, burglary, and electrical or mechanical breakdown.

While choosing a home insurance policy, you need to know diligently about the various aspects which are as follows:

Scope of Coverage
Best home insurance is not just restricted to belongings inside the house. In case of theft from cars or while travelling, if your belongings are stolen, then that can get covered under home insurance policy. So, if you are a frequent traveller, go for an insurance policy that provides a risk cover of your belongings as well.

In case of a tenant, you need to buy structural insurance for your home. So, go with the policy that offers insurance of the contents of the house. Being a landlord, you can neglect buying a policy that covers the house and leave it to the discretion of your tenant. So, choose a policy wisely as per your requirements.

Claim Settlement Ratio
Go with an best home  insurance plan from the company which offers minimum turnaround time for the claim settlement. In case of uncertainty, the main purpose of any insurance policy is to provide financial stability as you might fall under an extreme financial crunch. So, it is highly advisable to check the previous claim settlement records of the company before choosing it as an insurer.

Reputation of the company
Choose a company with well appointed staff that is capable to address your queries on time. It is very important to obtain insurance from a company which has customer friendly staff who can resolve your doubts and provide assistance on time.

Earthquake Cover
The usual home insurance policies are excluding of Earthquake cover which ensures risk-cover against overflow of seas, lakes and rivers due to earthquake. In case, you reside in such uncertainty-prone areas, you can obtain risk-cover for these natural calamities as well by paying some extra premium amount.

Theft Cover
Not just the contents like electronic appliances, other valuables like jewellery and precious stones can also be insured under the content of home insurance policy provided, they must be kept in the safe in your house. But you need to provide valid invoices or bills against all valuables that you wish to get insured.

Inflation Adjustments
Before zeroing down to any insurance policy, you need to ensure that the coverage offered by the insurance company gets automatically adjusted as a protection against inflation. In case of exception to it, such policy is required to be reviewed if stretched for a longer duration of time. Policy with shorter time span does not get affected much by the inflation factor.

Comparison of policies available in market
Today, the market has been flooded with numerous policies offered by different insurance companies. Being a well-informed customer, you must review and compare the covers offered by various policies against the premium charged. Key in for a policy that offers insurance covers at par with others with the least premium cost.

Avoid Under-insuring your Home
Review your cover periodically to ensure that your house and its contents are not under-insured. In the event of under-insurance, the insurer assumes that the policyholder has agreed to self-insure for the remaining cost. An insurance cover for instance, bought for 5 Lakhs now, if estimated at Rs. 7.5 Lakhs after 5 years for its cost of construction, will attract only two-third of the claim.

House on Owned Land Vs Apartment
If the land belongs to you, you can rebuild you house in case of uncertainty but when you own an apartment, you cannot reinstate your home alone. So, it is always recommended to buy the best home insurance for the entire premises as the insurance-cover for your apartments only will be not of much help.

Following are the instances for which the insurance company shall not be liable to pay in the event of their occurrence:
1. Any damage or loss arising out of livestock, pedal cycles, and motor vehicles unless previously declared to the company.
2. Any illegal property acquired or stored which is subject to forfeiture.
3. Any cash, money, deeds,  exchange of bills, debit or credit cards, manuscripts, stamp, bullions, bonds, stocks or share certificates, business books, unless previously declared to the company.
4. In case the home remains unoccupied for more than 30 days and the insured fails to inform the insurance company about the same.

Benefits of Procuring Best Home Insurance Cover:
1. Safeguarding your dream home against varieties of unwanted events.
2. Paying off premium can be as low as 1% of the value of the risk covered under best home insurance.
3. In case of constrained home-shifting, the additional cost of renting an accommodation shall be borne by the insurance company.
4. From terrorist attacks to water tank breakdowns – a host of activities are covered depending upon the type of policy chosen.

Two ways of Buying Home Insurance:
1. Market Value/ Depreciated Cost Value Basis
Market value is value of your house after accounting for the depreciation in terms of insurance. An insurer generally depreciates the market value by 2% per annum going up to 100% in 50 years.

2. Reinstatement Basis
In this case, the depreciation is not taken into account, so this type of home insurance is apt for the content of the house. You need to pay an extra cost for home insurance as a premium for this type of policy.

Strategies to steep-down your Insurance Premium
1. Contents of house that are too old need not be covered under insurance. Make an exhaustive inventory list of products to be insured excluding contents that are not precious. For instance, a black-and-white TV which is 15 year old makes no sense to get added to the insurance list even at depreciated value.
2. You may agree to share the burden of repairing to reduce the premium on home insurance cost.
3. Accounting for more than one insurance policy attracts discount from many insurance companies. So, always try exploring this opportunity as well.
4. Installing safety equipment like CCTV camera, security guards and fire safety alarms also attracts discounts in the premium.

Steps to file a Home Insurance Claim
With a deadline varying between 7-15 days, each insurance company has the norm to get informed in the event of a mishap the insurer. You need to lodge an FIR before filing your claim and the copy of the same needs to be submitted to the insurance company in the course of filing claim. List of documents that need to be submitted while claiming the insurance for home are as follows:
1. Invoices of the owned articles
2. Supplier’s original invoice for replacement
3. Copy of the FIR lodged
4. Fire Brigade Report
5. Police Investigation Report
6. Court Summons
7. Repair Estimates
8. Medical Officer’s Certificate for disability or death
Note: You may require submitting other documents as required by the insurance company apart from the list above.

Since house is one of the biggest assets, it makes true sense to insure your house as well as its contents.