Home insurance policy: 4 reasons why you need to buy it

Published: September 6, 2017 1:23 AM

While owning a home is an aspiration for many people, it is often the culmination of many years of hard work.

Home insurance policy, home loanA home insurance policy not only covers the structure of your house, but also the assets within. (Reuters)

While owning a home is an aspiration for many people, it is often the culmination of many years of hard work. Given the money and effort that goes into buying such an asset, it is only fair that it is kept safe and secure. In spite of the fact that there has been an increase in the purchase of houses in the country, home insurance is still an under-purchased product. Most people are unaware of the benefits it offers.

A home insurance policy provides cover for loss or damage of the house and its assets. Following are a few ways in which a home insurance policy can help you protect your prized possession:-

Safeguards your house from natural, man-made disasters

A comprehensive home insurance policy will protect your home in situations such as terrorism, fire, and even during natural calamities such as the recent Mumbai floods, earthquakes, storms, and the like. The policy is built depending on the needs of the customer. For example, if the customer lives in a place that is prone to floods, they can choose a cover that will cater to the losses they may suffer in the event of a flood.

Compensates for loss/ damage to personal assets

A home insurance policy not only covers the structure of your house, but also the assets within. These include valuable jewellery, electronic appliances, furniture, luxury and antique items and the like. This is helpful in situations such as theft where the insurer will often arrange for the items to be repaired or replaced.

Looks after temporary living expenses

Often times during reconstruction/repairing of your home, you will need to rent another house or move into a hotel temporarily. In such circumstances, a home insurance policy will help you stay financially independent by covering your expenses.

Applying for home insurance

The process of getting home insurance is simple. To start with, you have to decide what they want their home insurance policy to cover. One may also compare the various policies offered by insurance providers before shortlisting one. An application form is then required to be filled.

One of the most important things to do when applying for a home insurance policy is to read the terms and conditions carefully so as to stay aware about what the policy includes or excludes and the claim process. It is recommended that customers choose their deductibles wisely as a higher deductible can reduce your premium but will become an out of pocket expense in the event of claim.

It is important that you declare the value of assets that are being covered accurately so as to derive the right sum insured figure. Also remember to check the policy every three to five years as the cost of reconstructing a house is bound to appreciate due to inflation.

To conclude, a home insurance policy is the best way to ensure that your house stays protected and is able to protect you.

Puneet Sahni is head, Product Development, SBI General Insurance

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