A lot more than your lifetime savings go into building a house, and then making it a home.
While we take great pains to ensure that our homes are comfortable and beautiful, most of us do not consider taking efforts to protect our house and its contents financially against possible losses. We cannot deny we live in an extremely dynamic world where environmental and political changes are not uncommon – we are seeing floods in areas that never experienced rains, and drought in areas that earlier had perfectly normal monsoon. Open any local daily and the newspapers are full of crimes from riots to thefts to burglaries that have happened in and around homes in broad daylight. With this background, home insurance is increasingly becoming a very vital part of every person’s broad long term financial plan. Moreover, with continuous improvements home insurance has become increasingly compelling – here is a short snapshot of what the newer versions of home insurance have to offer.
All round protection:
Home Insurance policies are extremely comprehensive in its coverage. They provide all round protection against nearly all financial risks that your home is exposed to. For instance it covers your house and its contents against fire, natural calamities like earthquake, floods, burglary, terrorism, riots amongst a long list of other man made or natural calamities/losses. It covers your home structure and contents including furniture, white goods, jewellery, artefacts, paintings, portable equipment. It also covers you from financial liability due to third party person or property damage. While the core product provides the base protection to the house, the product also comes with unique add-ons depending from insurer to insurer -some of the coverages being loss of rent, alternate accommodation cover, keys and locks replacement, lost wallet, dog insurance etc.
Modular, customizable cover:
Whether you are an investor, homeowner or tenant – or whether you have a standalone house or apartment, Home insurance can be customized to your needs. For instance, you can buy insurance only for the structure, only for the contents, or for both the contents and the structure – as it is suitable for your needs. What’s more the valuations can also be structured as per your needs. Preference on choice of valuation vary from the ready reckoner rates of the state revenue departments, cost of construction as well as depreciated value. Similarly you can cover the contents of the house on new for old basis as well as indemnity value (depreciated value) basis.
Extremely simple buying process:
Buying home Insurance a few years back used to be a very difficult affair. You were required to provide micro level details like serial numbers for each asset you wanted to cover. Many insurers even required invoice copies before they insured the contents in your house. Now buying home insurance is very simple. For standard coverages, you are required to provide minimal information about the assets you wish to cover and you can get the policy issued instantly at the branch office or online.
Cheaper than your telephone bill:
While the perception could be different, Home Insurance is more affordable than your monthly telephone bill. A 50 Lakh cover for the building structure of the home will cost you around Rs. 250 a month with a leading insurer. If you add furniture and contents of Rs. 4.50 Lakh and say Jewellery of Rs. 5 Lakh the premium be around you Rs. 500 a month only.
Simplified claims process:
A good number of insurers in the mission to make home insurance simpler and more inviting to customers have worked hard to smoothen every process involved in home insurance. Home insurance claims hence are no more tedious affairs involving multiple surveys and assessments. Depending on the type of loss, all you need to do is provide standard documentation to substantiate the damage, sign a few papers, and your claim will be processed smoothly.
Dos and don’ts with respect to home insurance:
Now that you have a clear idea around home insurance and how it is extremely modular, affordable and convenient to buy, here are some Dos and Don’ts you must consider before you sign-up for a plan.
1) Read the policy terms and conditions carefully, especially the claims process and what kind of documents are required for each line of coverage.
2) Research and compare the terms and conditions as well as claims process across leading insurance companies before you decide on one of the companies. Do not decide merely based on price.
3) Buy your policy from a good insurance intermediary who is conversant with home insurance coverages, exclusions as well as the claims procedure, so that you don’t have to run pillar to post in case of a claim.