Home Insurance: A Shield Against Loss/Damage
The home insurance policy offers protection to the structure and contents of the house in the event of any physical destruction or damage incurred to the house by any unavoidable perils.
Home insurance will provide you cover against any ‘Acts of God’. Moreover, even with the latest safety equipment accessible in the market, there are chances of burglary or robbery taking place. Therefore, it is essential to take extra care and opt for house insurance policy coverage, which will provide you cover against any damage/loss incurred due to any natural or man-made calamity.
Stay insured by opting for house insurance for a longer period in a hassle-free and cost-effective way. Home insurance is popularly known as homeowner’s insurance. It is a sort of property insurance covering private residence.
It is important to possess a home insurance policy and secure from any unforeseen circumstances. In the time of your need, a home insurance policy will always be at your side.
Having property insurance essentially assures you of security and certainty in an otherwise uncertain world.
By investing in a good home insurance policy, also referred to as homeowners insurance, you can protect your home from threats. Do not wait for a calamity to remind you of the need for buying property and casualty insurance opt for it beforehand!
What are the Salient Features of Home Insurance?
Home insurance plans offer coverage of the liabilities that arise out of damages to the house and/or the contents due to man-made reasons like burglary, theft, etc. as well as natural calamities like fire, floods, lightning etc. Here are some of the ley features of home insurance policy:
Cover for Damages:
The fundamental constituent of a home insurance policy is the coverage it offers against different damages. Home insurance policies not only protect your house but its surroundings, and the contents of the house.
Covers the Building:
Cover for the building/structure is the basic coverage that every home insurance plan offers. This protects the physical structure of the building/house/dwelling against different risks and perils. The coverage offers protection to the structure including electrical apparatus, air-conditioning, building, plumbing, heating etc.
Covers Additional Structures:
Apart from coverage to the building, home insurance policy also offers coverage to the additional structures around the house (that might not necessarily be attached to the building). Some of the examples may be fence around the house, detached garages, retaining wall, backyard shed, mailbox, the driveway, pool etc.
Covers Personal Property/Possessions:
Home insurance policies also offer cover for personal possessions/property or the house’s contents against different perils and risks. House insurance policy might include electrical appliances personal computers, television sets, refrigerators, microwaves, air-conditioners, etc. It includes furniture such as dining tables, couches, beds, together with furnishings such as rugs, curtains etc. Most often, expensive assets including jewellery are also covered.
Top Benefits of Home/Property Insurance
There is no denying of the fact that house insurance is necessary; however, there are other benefits of buying such type of property insurance policy. Have a look below:
- Get comprehensive coverage to both the content and structure of your home.
- Secure your every asset from any mishap by opting for a right property insurance plan.
- Buy home insurance policy at comparatively lower premium rates than other insurance policies.
- Reduce stress and tension level for you will have property insurance to fall back to, in case of unforeseen circumstances.
- Timely house insurance pay-outs allow families to go through the rebuilding process quickly, helping them to move on and get back to their normal daily lives.
- People who do not want to buy a comprehensive home insurance policy can buy a Fire Insurance Plan that will offer a cover against perils like fire, etc. Nevertheless, you should not forget that the coverage offered by a comprehensive house insurance plan is much higher.
- Moreover, many house insurance companies also offer riders like Temporary Resettlement Cover, Loss of Rent Cover, Dog Insurance Cover, etc.
- This is not it; house insurance claim settlement process is hassle-free and quick in many cases.
Why Should You Buy a Home Insurance?
When you are a homeowner, it is important to secure your home from every possible peril. Let us understand some reasons, which make buying house insurance a necessity:
- First things first, house insurance is important as it protects your dwelling from any damage/loss that may incur at any point in time. For instance, if a tree fell upon the roof of your house or a vehicle collided with the boundary wall of your home premises, the right type of property insurance will cover for the incurred expenses.
- On the off chance, if you intend to take a loan to either construct a house or buy a hose the bank will ask you to provide evidence that the property is insured on, which you are looking forward to taking a loan.
- In case, if a third-person suffers any kind of injury while on your property, having a home insurance policy will secure you from any legal and third-party liabilities.
- In case of damage occurs to the insured property, having the right property insurance will provide cover for the repairment expenses.
- It also provides cover for the appliances such as air conditioner, refrigerator, television, microwaves and other electrical appliances, furniture and furnishings and at times the jewellery as well depending on the type of house insurance plan you choose.
- Choosing the right property insurance provides coverage even if you are not present at your home and you are at a distant place. Besides, in the process of repairment/reconstruction, alternate accommodation for a specified time will also be arranged. A home insurance policy will cover all the incurred expenses.
- The home insurance policy also provides cover for any damage/loss incurred either due to theft or due to robbery.
- Last and not least, a property insurance policy gives you a sense of satisfaction and peace of mind as it will secure you from any unwanted fiscal cost.
Types of Home Insurance
To meet different requirements of customers from every walk of life, the house insurance providers in India offer various insurance policies.
The various types of house insurance policies help the customers to comprehend the importance of having an insurance policy and zero down a policy on the premise of the specific requirements.
In India, generally, the following types of home insurance policies are offered, which are:
Standard Fire and Special Perils Policy
This is one of a kind of property and casualty insurance policy, which is offered by most of the property insurance providers within the country. It offers protection against special perils and fire-related outbreak.
The owners of a house usually buy this policy or the tenants as the situation may be. A Standard Fire and Special Perils essentially provide cover to home against any loss/damage incurred due to any natural calamity such as earthquake, volcanic eruption, etc man-made calamity, any missile testing operations, overflowing of water from tanks, pipes, and so on.
Public Liability Coverage
A home is a place where you reside and it is obvious that your friends or relatives will visit you.
On the off chance, there is a possibility that any of the guests or any third-party may encounter any loss or damage caused either to them or the property within the insured’s house. Under such circumstances, this house insurance comes at your rescue.
Building Structure/Home Insurance
This house insurance policy offers protection to the structure of your home from any hazard or perils. Besides, it also provides a cover against any damage caused to the permanent fixings of the home such as fitting in the kitchen, washrooms, ceilings and so forth.
Of course, there are houses, which have garages or rooms/shed on the outdoor premises. This type of property insurance also provides extended cover to such structures as well.
Burglary and Theft
In case of any robbery or theft that happens in the insured house causing damage to the contents present in the house, this house insurance policy provides cover for the equivalent.
This house insurance protects you and your family. In an unfortunate event such as an accident or any physical injury incurred anywhere across the globe, which led to a permanent disablement or demise of the insured person then the compensation for the same shall be provided.
Remember, buying this house insurance assures that not just the house beside every content present in the home is valuable and it protects the goods from any damage or loss under perilous situations like fire, theft, and so on.
Right from the refrigerator, television sets to any important document are covered within this house insurance policy. When the interior of your house is destroyed due to mishap such as flood or has been burnt to ashes under a fire outbreak this house insurance will provide you with a cover.
If you are a landlord, you need to maintain the building/flat and its structure. It is a big responsibility.
Besides, a standard building insurance policy is generally not designed catering the interest of a landlord. So having this house insurance policy is necessary, as it will protect you from any loss of rent or public liability.
If you are, tenant it means that you might be residing in a rented flat or house. Therefore, if you are a tenant, opt for choosing a cover for the content that belongs to you.
This house insurance is a necessary buy for every tenant.
Eligibility Criteria to Buy Home Insurance
House insurance is an important aspect to secure your home against any unforeseen event. Anyone fulfilling the following criteria is eligible to buy a home insurance policy:
- Anyone willing to buy property insurance must be a resident in India. The policy can be bought by individuals as well as by the companies. However, a house insurance multi-year policy can be bought either by the owner of the house or the flat.
- The person intending to buy property insurance must own the property or should reside in the property.
- In case you live in a society, then you must be a member of the society managing committee.
- To purchase house insurance for the society, the member of the society managing committee can make the purchase. The policy will cover the society as well as the utilities, which are in common use of the society.
Handy Tips for Choosing a Home Insurance in India
Various home insurance providers in India offer different plans as per individual needs. To ease your selection, we have listed down important points, which should be compared while choosing one home insurance provider over others:
Check Premium and Coverage
Firstly, evaluate risks, which your home is facing or might face in the future. For example, if you live in a flood-prone area then you should ensure that your property insurance policy is covering these risks also. While checking coverage, it is prudent to check if the premium fits within your budget or not. You can solicit premium quotes of individual insurers or use the comparison chart to compare property insurance premium quotes and then accordingly opt for a property insurance policy.
Check Claim Settlement Ratio
A good company is judged by the turnaround time of settling claims. The very purpose of insurance will be defeated if you do not get a claim when it is required. Therefore, it is worthwhile to check the claim settlement record of property insurance providers before zeroing in on any house insurance providers.
Look at the Company’s Reputation
The first and foremost characteristics of a good company are that it has customer-friendly staff. Does your house insurance provider have competent customer service representatives who are capable enough to resolve your queries quickly? It is always important to choose a property insurance provider who is well equipped to assist you at any point in time.
Inclusions in Home and Property Insurance
Home and property insurance covers losses to the structure and content of your home/ property due to natural and man-made calamities.
Fire and Perils Cover
- Aircraft damage
- Riot, strike
- Storm, cyclone, flood
- Missile testing operations
The policy offers coverage against loss or damage to any of the insured property. However, many policies do not cover flood or overflow of the sea, rivers and lakes due to earthquake.
Burglary and Theft Cover
The contents of the home are also covered against burglary or theft. This type of property insurance coverage will also be extended to silver articles, jewellery, precious stones and other valuable items, provided these are kept in a locked safe within your home premises.
Exclusions in Home Insurance
- Loss or damage caused by wear & tear and depreciation
- Loss of cash
- Loss or damage caused by war, invasion, the act of a foreign country
- Loss or damage caused by nuclear war
- Loss, destruction or damage caused to any electronic equipment due to over-running or excessive pressure
- Earth’s Movement: Damages occurred due to volcanic actions of erosion is in many cases not included.
- Any pre-existing damage such as wear and tear of any other defect.
Who Should Buy a Home Insurance?
Home insurance policy is for people who have a home whether own or rented. There is a myth that only home-owners should buy a home insurance plan. Let us tell you a case of Mr Vijay Rao and how having a property insurance policy saved him during a crisis.
Two months after Mr Rao moved to a rented apartment in Mumbai, a catastrophic fire engulfed furniture and other appliances worth Rs 8 lakh. Thankfully, he had the right type of property insurance policy and he could manage to settle back to normal life again easily and without any financial stress.
It is a misconception that only house owners should buy home insurance. Although, the house may belong to a landlord it has contents which belong to you which makes it imperative to buy a property and casualty insurance. Irrespective of the fact that whether you are a tenant or owner, buying home insurance should be your top priority.
Even, there are various house insurance providers, which provide exciting discounts to people who have bought over 3 home insurance covers. However, do not let discounts make you buy those covers, which you do not need. For instance, if you are a landlord then avoid buying a property insurance policy to cover the contents of the house. Leave that to the tenant. There are various property and casualty insurance providers who offer discounts if you buy it for a longer duration. You can ensure the house for up to 10 years, which not only gives peace of mind but you also get a chance to earn lucrative discounts.
How to Apply for a Home Insurance Online?
Buying home insurance online is a quick and easy process. With a plethora of options available in the market, it is always better than before you zero down a house insurance policy, do the research work and select the correct type of property insurance plan that suits your requirements.
The following are the basic steps involved in buying a home insurance policy online:
- Once you have chosen the home insurance policy suits your needs, all you need to do is click either ‘Apply Online’ or ‘Buy Online’ tab.
- While applying home insurance policy online, the following information will be required to understand the type of property you intend to insure. The following details might be asked:
- Whether the property rented or self-owned
- The period of the policy required
- The policy will cover the structure of the property or will cover the structure and the contents.
- Location of the property
- Age of the property
- Type of the property
- Personal information along with contact details
- Once you give all the asked and relevant subtleties, you will get to know the premium amount that you end of paying while buying the home insurance policy.
- Before you make the payment, cross-check for the provided information. Besides, re-read the terms and conditions of the policy scheduled. Make the payment only when you are convinced with the plan.
- The payment can be made online either using any credit/debit cards or via net banking.
- Keep and save the fine print of the policy schedule.
Claim Settlement Process for Home Insurance
One of the most important aspects of buying a home insurance policy is the claim settlement process. The following are some pointers, which you might consider while making a claim:
- Primarily, it is important to analyze and assess the damage the house has incurred. Whether the damage incurred is major/minor, an estimate in regards to the same should be obtained.
- On the off chance, if a burglary or robbery has taken place the first thing to be done is file an FIR with the nearby police station. Once the FIR is lodged, inform the insurance provider immediately.
- Do not forget to take pictures or record videos of the sustained damages. Make sure that you cover all the corners of your house where the damage has incurred. Besides, do not touch the items that have been damaged. These help a lot, as they act as evidence while filing a claim in regards to the type of property insurance.
- While assessing the damage you need to consider all the expenses such as the labour expense, contents in the house that has been lost or damaged, which may be covered within the appropriate type of property and casualty insurance.
- Before you plan to take any kind of action, remember that you need to get in touch with your property insurance provider.
- Inform the insurance provider in regards to the claim within the specified time-limit mentioned din the policy schedule.
- Make sure that you maintain a file separately which contains all the receipts of payments and bills of the incurred expenses due to the loss/ damage. Do submit the entire bills to the insurance provider. Besides, be careful that any further damage is not caused to the house.
- Once you have notified the respective property insurance provider in regards to the incurred damage, you would be required to fill the claim form. Make sure that you do not miss out any important information. Besides, give all the information accurately. Do not delay in sending the completed claim forms. Remember, any delay in submitting the duly completed claim form will delay the process of claim and will not be initiated.
Once the respective insurance company receives the claim form, the insurance company will be sending a surveyor who will inspect the damage incurred of the insured property. In all likelihood, the insurance provider does not usually reject a claim; however, the inspection report submitted by the surveyor holds weight on the decision-making in regards to the claim.
After the insurance provider has accepted the claim, the settlement of payments is incurred towards any repairmen/renovation of the insured property, which suffered any loss/damage. In case of any queries or clarification related to the claim settlement process, it is always suggested to get in touch with the insurance provider with all relevant details.
A claim settlement process generally involves the following steps:
- Inform the insurance providers in regards to the claim by calling on the respective round-the-clock toll-free number.
- Once the Fir is lodged and the insurance provider is notified in regards to the same, the policyholder should provide with all the important and relevant information in regards to the bought policy as well as the damage incurred.
- Once the claim request is been intimidated by the insurance provider, the claim request is validated and verified. After this, the claim settlement request is thereafter taken forward to the Claims department of the particular insurance company.
- Within the next 48 hours or so, a surveyor is sent to inspect the damage or loss and accordingly prepares a report.
- Further, all required documents are submitted to the surveyor. The Final Survey report is prepared by the surveyor, which will be submitted to the insurance provider along with the required documents and sent within 7 days.
How to File for a Home Insurance Claim?
Almost every insurance company is having its deadline within which you have to inform about your loss. These can vary between 7-15 days so make sure you do it as soon as possible. Some companies even let you do with an email or SMS. Before you file for a claim, you will have to lodge an FIR and the copy of which you need to submit with the insurance company. Apart from the FIR report, the other documents which you need to submit are-
- Fire brigade report
- Medical Officer’s Certificate for death or disability
- An investigation report by police
- Suppliers original invoice for replacement
- Invoice of owned articles, if any
- Repair estimates
- Court summons
Note: This is an indicative list and you may be asked to submit other documents at the time of claim settlement.
How to Lower Your Home Insurance Premium?
Strategies that can help in bringing your home insurance premiums down are-
- Reduce your liability by agreeing to share the burden of repairing. It will help in reducing your premium.
- There are many such things in our house which are precious to us but there is no point in insuring them if they are too old. For instance, your 10 years old black & white TV might be working well, but there is no point in insuring it at a depreciated value. Be wary while making an inventory of products to be insured.
- Take two or more insurance covers to become eligible to get discounts.
- Like any other insurance plans, if insurers are convinced that you have installed all safety equipment at your home then you will become eligible to get discounted premium. If you have security guards posted 24x7 in the building and fire safety alarms installed at home, then you will get discounts in premium.
Get Ready, Get your Home Covered at PolicyBazaar
From free home insurance policy quotes to compare among best home insurance providers in India, we at PolicyBazaar are here to secure your home from all damages/losses. With us, insuring your valuable possession, ‘Home’ is now a matter of a few clicks. One can buy or renew an existing policy through our viable platform.
Moreover, if the presence of various property and casualty insurance providers has perplexed you, then talk to our customer support staff that will guide you on all aspects of home insurance and help you in making a wise and an informed choice.
It takes years to build a house so extend, its life with a right home insurance plan!
Home Insurance - FAQs
Ans: Ans: Home insurance provides coverage to house and its contents against loss or damage caused by natural (flood, storm, landslide, etc.) and man-made calamities (theft, burglary, strike, riot, terrorism, etc.)
Mainly there are three insurable components- structure (building), content (material assets) and people (family members and third party). You can go for the specific coverage either for the structure or content. Also you can go for a comprehensive cover that includes both structure and content.
Ans: Your home is precious and probably the most expensive investment of your life. It is not immune from perils like fire, theft, flood, etc. Disasters are unwelcome guests who do not knock your door before intruding your home. So it is always good to be prepared beforehand to minimize any loss or damage to your home. Home insurance protects you from losing your hard earned money by insuring your house against man- made and natural calamities.
Home insurance offers protection against both natural and man-made calamities. Mainly, it safeguards your house from-
- Bursting/overflowing of water pipes, tanks
- Leakage from automatic sprinkler installation
- Damage caused by vehicle of a third party
Home insurance policy doesn’t offer coverage to kutcha construction and under construction building. Some of the other exclusions of the policy are-
- Loss/damage caused by war or terrorism activity
- Loss/damage caused by radioactive contamination
- Loss caused by pollution/contamination
- Destruction caused by wear and tear of the house
- Any loss/damage caused in residence-cum-shop
- Any loss/damage caused in residence-cum-office premises
- Loss of cash, cards or other documents
- Painting, antiques
- Loss or damage caused when the house remains unoccupied for a long tenure, usually a month.
Home insurance covers the following contents-
- Furnishing items
- Expensive belongings
- Precious items like jewelry, gemstones, etc.
- Electronic items like laptops, televisions, etc.
- Home appliances like refrigerator, washing machines, etc.
Ans: Usually, the tenure is of 1 year, but few insurers are offering plans up to a term of 30 years.
Ans: It is the cost which would incur on reconstructing the damaged property. As per standard regulations, reinstatement cost includes value of foundation and it doesn’t include land cost.
Sum assured for the structure and content is calculated separately in following pattern.
Sum assured for the structure
Sum assured= Built up area x cost of construction per square foot
It is computed on the basis of reconstruction value and not on its market value. For instance, if the built up area of your house is 1500 sq. ft and the construction rate decided by the insurer is Rs 1000 per sq. ft., sum insured for your home structure would be Rs 15,00,000.
Sum assured for the conten
It is calculated either from the actual cash value (ACV) of the asset or from the replacement cost, i.e., Current Market Value – Depreciation
Methods that can prune your home insurance costs are-
- Increase voluntary deductible= You can lower the liability of the insurer by agreeing to bear a portion of repair at the time of claim. This helps in lowering premium.
- Don’t cover everything= Avoid covering very old items. Your 10-year old radio might be working fine but there is no point in insuring this low value item at a depreciated rate. Be choosy while picking items for coverage.
- Install safety equipments= Like car insurance, insurers award homeowners for installing safety equipments and following safety measures at home. If you have security guard posted 24x7 in the building, install fire alarm and fire fighting equipments at home, you can get discounts ranging between 10-15%.
- Group policies= Insurers offer 15-50% bulk discounts to group customers. The quantum of discount would depend on the condition, age and location of the building. Encourage your resident welfare association to bargain for lucrative discounts.
Avoid unnecessary covers= Don’t buy a cover just because it is there. Add-ons like terrorism cover or rent paid due to displacement will only make policy expensive.
Ans: Yes, compound wall be covered by home insurance as long as it is not a kutcha construction.
Ans: Yes, insurance companies allow you to increase sum assured value in your policy. At the time of increase in value, you need to pay premium for the increased sum assured for the remaining tenure.
Ans: Yes, you can insure your house as long as it is used as a residence and not for commercial purpose. Also the home should not be a kutcha construction.
Ans: If your home gets damaged then damaged portion may occupy space. You would have to remove debris to reconstruct your house. It is known as debris removal. There are many insurance companies which reimburse the amount spent on debris removal, subject to deductions.
Ans: No, an entire society cannot be covered under home insurance plan.
FIR is mandatory incase of riots, burglary, strike, malicious damage, terrorism and larceny. However, it is not necessary in following situations-
Impact damage due to accidental losses
Ans: Insurance coverage will start from the time your payment is received by the insurer.
Ans: From the time, transfer of ownership becomes effective, home insurance policy stands cancelled. Insurer will refund the remaining premium for the balance period to the insured.
Ans: Yes, you can buy home insurance policy from two companies. At the time of claim both companies will pay you on a proportionate basis.
Ans: Yes, you can make a claim on a partially damaged home.
Make sure you follow below steps to make a claim on partially damaged house-
- Inform the insurance company and send a duly filled form along with a rough estimate of the repairing work. Do not undertake any repairing at this stage, otherwise your insurer may reject your claim.
- After receiving claim form and requisite documents, a surveyor, appointed by the insurer, will visit your house to assess damages.
- The surveyor will file a report on the basis his findings. Based on his input, insurer will either accept or reject your claim application.
- Now you can undertake repair work. After the completion of work, surveyor will re-visit your house and submit a detailed report about repair and cost to the insurance company.
- After receiving bills and receipts, net liability will be computed on the basis of surveyor’s recommendation and applicable deductibles.
- If your claim is accepted, a cheque will be send to you at your postal address. However, if due to any reason, your claim is rejected, insurer will send a repudiation letter.
If your home is damaged, never undertake repair work without informing the insurance company, otherwise your claim will be rejected. Take following steps to make a claim in case of fire accidents.
- Inform the insurer by calling customer support number or via email.
- A surveyor, appointed by the insurer, will visit your house to assess damages and repair which need to be done and accordingly he will give a go-ahead for it. Never start repairing work before surveyor asses your house otherwise insurance company will not be liable to accept your claim form.
- Once the repair work is completed, surveyor will revisit your home. You can submit the duly filled claim form, fire brigade reports and bills to the surveyor along with additional documents requested to process claim.
Written By: PolicyBazaar - Updated: 08 May 2020