The world of insurance is complex, and so is the case with home insurance. Owing to several myths and misconceptions regarding home insurance, homeowners in India are reluctant to buy it.
We have seen the massive destruction of houses in the Nepal earthquake of 2015. Thousands of structures were destroyed in a few seconds by the powerful rocker. Natural calamities can happen anytime, anywhere. Hence we need to fix the perception that ill fortune is something that befalls only on other people and not us. It takes years, sometimes decades, to save our hard-earned income to build a home where we create special memories with our loved ones. So why not protect that abode by insuring it against calamities?
There are several myths regarding home insurance, and sometimes these misplaced notions lead to homeowners not getting the right coverage. In this article, we will go over some of these myths and attempt to dispel them.
Myth 1: Home Insurance Doesn’t Cover Acts of God
It is perceived that home insurance does not cover natural disasters. This is not true. Fire and perils like floods are usually covered under the first section of most home insurance policies. In almost all plans, this section is generally mandatory. However, in order to know what is covered by a policy, one must read the document carefully before buying it. This is because one insurance product could be different from the other. For instance, one insurance policy may not cover seepage of water through the walls due to heavy rains, but the same might be covered in another policy. Compare different policies on offer and choose the one that benefits your needs the best.
Myth 2: Claim Settlement Is A Complicated Process
Is claim settlement for home insurance difficult? The process is easy if one knows how to file a claim. In case of damage to the property, the insured homeowner is required to inform the insurer insurance company—either the local office or the call centre of the company—at the earliest about the damages caused to the home. Following the paperwork and claim-filing by the insured, the insurer sends an agent to survey the losses incurred. The agent’s report is then submitted to the insurer, and the report’s contents is given weightage while considering the value of the claim. Also, the insurer may ask for some documents from the insured to verify the claim. Once the documentation is done, the process of claim settlement is completed.
Furthermore, advancements in technology have helped insurers to a great extent. Many insurers now store the policy documents in an electronic form (insurance software). This would help keep track of policy details in case the insured were to lose them during a calamity. Usually, the only question the insurers ask in such a scenario is the year of the issue of the policy for the claim settlement.
Myth 3: Low Premium Means Low Insurance Coverage
There are multiple ways of reducing premium costs. The insurer will be inclined to give you premium discounts if told that you have taken safety precautions of your own volition and installed such devices as a fire alarm or a burglar alarm. Additionally, premium costs can be brought down further by comparing various insurance products in the market and choosing the one offering the most value. You can reduce your premium costs further by increasing your deductible—the share of the damages that you must pay out of your own pocket. Do not buy add-ons that are not necessary in your region. For example, if you live in a peaceful area, a terrorism cover may not be for you.
Myth 4: You Need To Be A Homeowner
In order to purchase a home insurance policy, the insured need not necessarily own a house. In fact, a tenant can also purchase home insurance for the contents of his home. If the tenant shifts to another place, he or she can get the policy approved for the change of address. Similarly, a house owner can purchase a policy to get the structure of the rented accommodation insured.
Myth 5: Burglary Is Not Covered
Not only are natural disasters covered under home insurance policies, but they usually also cover any damages owing to robbery or even an attempt at burglary. The contents of your home—precious items such as jewellery or important documents, semi-precious items such as electronics—can all be covered. But remember to cover only the truly valuable items at home to keep your premium costs under check.
As different policies vary in their terms, conditions, and coverages, reading the policy document carefully is of prime importance. Also, before buying a policy, one needs to understand the perils covered. With online options, purchasing home insurance plans is easy as breeze these days, with comparisons among different plans and hassle-free payments in order to buy one.
The author is CEO BankBazaar.com
