Navneet Dubey Moneycontrol News
Have you thought of taking home insurance? Just like insuring other valuables, one should also not neglect insuring one’s home. However, it is often not in the priority list for most people. But if one buys the cover, it acts as an important backup in case things go wrong in future.
"Home Insurance is not mandatory to have; however, it is always good to insure your assets to avoid major losses in case of any unforeseen circumstances. Having your house insured can protect you from financial losses caused by fire or natural calamities like flood, earthquake. Home insurance also offers you cover for personal property upto a certain limit in case of theft. It is better to be safe than sorry," Naval Goel, CEO Founder, PolicyX.com told Moneycontrol.
A home insurance policy can also cover household items like television, refrigerator, air conditioning unit, furniture, fixtures, kitchen items, clothing and personal belongings. “Some policies also include jewellery and valuables under the same base plan itself or as an add-on. An additional premium payment can also extend coverage towards items like works of art and paintings,” Mahavir Chopra, Director, Health, Life & Strategic Initiatives, Coverfox, said.
However, before buying a home insurance cover you should know these five major categories of risk that can be covered and under the policy:
Earthquake
Almost every insurer provides complete coverage against natural calamities like earthquake. Tarun Mathur, Chief Business Officer- General Insurance, Policybazaar.com told Moneycontrol that the feature is generally pre-included in all insurance policies and it gives the policyholders the choice of insuring their both, structure and the contents. “The premium for a standard cover, which includes coverage against natural and man-made calamities, can be purchased for as low as Rs 60 per Rs 1 lakh,” he said.
Fire
A fire accident of any type of property can cause severe damage to the structure and its contents. Home insurance policies available in the market offer adequate coverage for two major constituents of a home. First is the structure that makes the building and second is the contents of the house. As a home insurance seeker, you can select a cover for the structure or the content or both the components. The policy provides cover against fire and allied perils for all fittings and fixtures. Coverage is also provided for household appliances, home contents, jewellery etc.
Flood, Storm, Lightning
Cover against natural calamities like flood, storm, and lightning are not always covered under a home insurance policy. “As an insurance seeker, you can always buy add-ons to protect your home and its contents from any of the mentioned natural calamities. These add-ons increase the premium of your home insurance but at the same time provides complete coverage against flood, storm, and lightning,” said Mathur.
Explosion (Terrorism)
Most insurers in India cover acts of terrorism just for the first 10 years of the insurance. However, the cover is only offered when you buy an add-on policy along with the comprehensive home insurance policy. “Sri ram secure plan, Bajaj standard fire insurance policy or HDFC Ergo’s Home Insurance-Long Term is one such policy that provides adequate cover against acts of terrorism like an explosion,” told Mathur.
Riot, Strikes, Burglary, Theft and Larceny
If a policyholder goes for a comprehensive policy (structure + content) then generally events like burglary and theft are covered under the policy as an inbuilt feature. Some insurers might provide it as an add-on protection also. Same goes for events like riots and strikes.
The content cover is generally a short-term cover ranging from 3 years to 5 years depending upon the company.
“There are companies with separate plans for burglary like Reliance General Insurance- Burglary and House-Breaking which covers business premises against these events. The policy also provides extension cover for risks like a riot, strike, malicious damage and theft,” told Mathur.
Here is a sample of some home insurance policies on offer and how much they cost
*Premiums are for sum insured of Rs 50 Lakhs for structure and Rs 10 Lakhs for content
Claim paid in home insurance are as per the damage caused upto the sum insured
*The premium mentioned above has to be paid annually.
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