5 things to know before buying a home insurance policy

February 25, 2020 3:31 PM

A typical home insurance policy covers you against fire and allied perils, including lightning, flood, earthquake or storm.

home insurance, householder's policy, comprehensive home insurance policy, theft, fire and allied perils, lightning, flood, earthquake, stormA comprehensive home insurance policy will pay you for the damage caused by natural calamity, i.e. flood, earthquake, cyclone, etc.

“Home is where the story begins”, but still home insurance is certainly not the first thing on most of the people’s mind while buying their dream house. But, nevertheless, in case things go wrong, it acts as an important backup. A typical home insurance policy covers you against fire and allied perils, including lightning, flood, earthquake or storm. However, covering your house against theft or burglary may cost you some extra bucks. Therefore, it is advisable to go for a comprehensive home insurance policy (structure+content).

Home insurance majorly includes two types of coverage, i.e. damage caused to the structure and loss of content (personal belongings). In the case of burglary or theft, the personal content coverage helps you in repairing and replacing the contents if stolen or damaged. The comprehensive home insurance plans available in the market safeguard the content of your home as well as your personal belongings. Some insurers may provide this as an add-on cover but there are plans specifically designed for burglary. For a comprehensive coverage, you need to choose the sections wisely. The more you choose, the more comprehensive and beneficial your home cover will be.

1. Compare Online

Comparing your home insurance policy online allows you to confirm on the various inclusions and coverages that are a part of the policy you intend to buy. It is possible that the policy you are planning to buy offers less coverage comparatively to the other. Therefore, while buying a home insurance cover do remember that by comparing the policies online, you can make a decision to choose the one that provides you with the best coverages possible at most affordable prices.

2. Coverage

A comprehensive home insurance policy will certainly pay you for the damage caused by natural calamity, i.e. flood, earthquake, cyclone, etc. Though the insurer will not pay you for regular wear and tear of your house, but they will certainly pay you for the damage incurred. With the unpredictable weather patterns, it is smart to get an adequate cover which provides comprehensive coverage for your house. Also, it is advisable to give equal importance to both structure and content cover.

3. Add-on Covers

The add-ons play a major role under home insurance as they have a great impact on the coverage being offered. In case of unexpected damage to your home and/or its contents, your home insurance cover adequately covers you for the event. There are various natural and man-made events that could damage your property. These events are covered under a home insurance policy. To safeguard your home against the unforeseen calamities and danger, buy the comprehensive home insurance policy that provides adequate cover to the property structure and its contents.

4. Cost Efficient

Unlike life or health insurance, the premiums for home insurance are significantly low. The average premium for insuring a Rs 50 lakh house comes around Rs 2,200 to 2,600 per annum. However, a comprehensive home insurance plan to insure your Rs 50 lakh house along with its added content (furniture, home appliances, personal belongings, etc.) worth Rs 5 lakh would cost you Rs 6500 to Rs 7500 annually. To maximize customer satisfaction, insurance companies and web aggregators offer home insurance cover with minimum documentation.

5. Individual Plan

Many housing societies offer home insurance that covers the cost of reconstructing the structure of the building. However, the risk of damage to the content lies with the homeowner. Therefore, it is advisable to go for an individual home insurance plan that provides comprehensive coverage (structure+content).

All one needs to understand is the importance to invest in a home insurance policy at the right time and protect your dream house from any unforeseen expenditure, rather than to wait for some accident or calamities to occur and regret.

(By Tarun Mathur, Co-founder & CBO, Policybazaar.com)

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