Things to Consider Before Buying Home Insurance
Home Insurance is an investment that all home investors must consider spending money on, as it financially safeguards them in the event of any crises occurring on their property. This write-up seeks to shed light on what a Home insurance is, what a home insurance provides coverage against, the types of home insurance in India, and whether or not it is worth investing in.
What is a Home Insurance?
A form of a property insurance, a Homeowner’s Insurance provides for a premium to the insured, financial coverage against losses and damages incurred at the insured individual’s place of residence. This is applicable to furnishings and other assets found on the property. Additionally, this insurance provides liability coverage against accidents occurring inside the home or on the property.
Types of Home Insurance Coverage Plans
Standard Fire and Special Perils Policy – As the name suggests, this policy provides coverage against damage caused by fire, along with certain natural calamities. Damages covered include those caused by explosions of any kind, as well as man-made disturbances like riots and damages incurred as a result of malicious intent.
Home Structure/Building Insurance - Providing coverage against any structural damages and / or risks, this policy protects permanent fixtures within the property. These may be fittings in a bathroom, kitchen and / or ceiling. Extended structures on the property like garages are also insured.
Public Liability Coverage - This provides coverage against any damage caused to a third party on the insured property.
Personal Accident - This form of insurance provides protection to the insured individual and their family, in the event of the insured individual becoming permanently disabled or dying – regardless of where either of these events occur.
Burglary & Theft - This provides coverage for and compensates in the event of any valuable assets or furnishings being stolen from the property.
Contents Insurance – This insurance provides coverage towards the assets one possesses in their home and uses to personalise it. Documents, portable equipment, technological devices and home appliances are covered by this policy.
Tenants’ Insurance – For tenants, it makes sense to look for a policy that protects their assets found on the property, rather than the building itself, since they don’t own the land. This policy provides financial coverage for the contents a tenant has.
Landlords' insurance – Landlords are responsible for the upkeep of their property and this form of coverage provides them with the financial security in the event of loss of rent and / or public liability.
What isn’t included in these mentioned Plans?
Now that we know what a Homeowner’s Insurance covers, what isn’t included should also be considered. The following isn’t applicable to a Home Insurance –
- Willful destruction of property
- Damages incurred by natural wear and tear
- Damages and losses incurred due to extreme events like war and nuclear bombs
- In the event the property hasn’t been occupied for over a certain period of time and damages and losses arise on it, a Homeowner’s Insurance will not provide coverage against this
- Losses in the form of cash, antiquities and collectibles aren’t ordinarily included. That being said, individuals can avail special add-ons for a higher premium, which provide financial protection against the last two forms of valuables.
Is House Insurance worth it?
In order to answer this question, Homeowner’s must consider the expenses they incurred when buying, building and/ or decorating their home. They must also consider the costs they would incur in the event of any losses and/ or damages occurring on their property. These expenses more often than not can end up being significant and while there exists no guarantee that an individual will run into them, there exists no guarantee that they won’t. While a Homeowner’s Insurance is an added expense, which can require recurrent premiums, it can help provide coverage in the future which could be an immense help.
When asking themselves “should we buy a Home Insurance?”, individuals must consider a number of Home Insurance policies and compare them prior to selecting a single one. Those who are renting their current premises can avail a Renter’s Insurance. It is vital that individuals read the fine print prior to investing in a particular plan, such that they aren't caught unaware.
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