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home insurance india

Home Insurance: A Shield against Loss/Damage

Home insurance is popularly known as homeowner’s insurance. It is a sort of property insurance covering private residence.

Well, this is how we define home insurance.

Now, there’s a saying:

 

“A house is made of walls and beams; a home is made with love and dreams.”

 

There is no such place like home in the entire Universe. After all, it is a place where you and your loved ones can rejoice, weave thousands of memories that last for a lifetime. While we put our life’s savings into buying or constructing a home but we rarely realize that our home needs a protection in the form of insurance too. By investing in a good home insurance policy, also referred as home owners insurance, you can protect your home from threats. Situations like burglary, fire, earthquake or destruction of house due to riots are quite common in India.

Don’t wait for a calamity to remind you the need of buying a home insurance, opt for it beforehand! 

home insurance benefits

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. These 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 is also covered.

Top Benefits of Home Insurance

There is no denying of the fact that house insurance is a must; however, there are other benefits and riders to buying such a policy that will add convince you totally. Have a look below:

  • Get comprehensive coverage to both content and structure of your home.
  • Secure your assets from any mis-happening.
  • Buy home insurance policy at comparatively lower premium rates than other insurance policies.
  • Reduce stress and tension level for you’ll have a home insurance to fall back to, in case of unforeseen circumstances.
  • Timely insurance pay-outs allow families to go through rebuilding process quickly, helping them to move on and get back to their normal daily lives.
  • People who do not want to buy Comprehensive Home Insurance Policy can buy a Fire Insurance Plan that will offer a cover against perils like fire, etc. Nevertheless, you shouldn’t forget that the coverage offered by a Comprehensive Home Insurance Plan is much higher.
  • Moreover, many insurance companies also offer riders like Temporary Resettlement Cover, Loss of Rent Cover, Dog Insurance Cover, etc.
  • This is not it; Home Insurance Claim Settlement Process is hassle-free and quick in many cases. 

home insurance tips

Handy Tips for Choosing a Home Insurance in India

There are various home insurance providers in India that 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 company over other:

Check Premium and Coverage

Firstly, evaluate risks which your home is facing or might face in a future. For example, if you live in a flood prone area then you should ensure that your home insurance policy is covering these risks also. 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 comparison chart to compare premium quotes.

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. So, it is worthwhile to check the claim settlement record of companies before zeroing in on one insurer.

Look at Company’s Reputation

The first and foremost characteristics of a good company is that it has customer friendly staff. Does your insurance company have competent customer service representatives who are capable enough to resolve your queries quickly? It is always important to choose a company who is well equipped to assist you at any point of time. 

home insurance features

Inclusions in Home and Property Insurance

Home insurance covers losses to the structure and content of your home due to natural and man-made calamities.

Fire and Perils Cover

  • Aircraft damage
  • Fire
  • Lightning
  • Riot, strike
  • Storm, cyclone, flood
  • Missile testing operations

Earthquake Cover

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 home are also covered against burglary or theft. The 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.

home insurance benefits excludes

Exclusions in Home Insurance

  • Loss or damage caused by wear & tear and depreciation
  • Loss of cash
  • Loss or damage caused by war, invasion, act of 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 or erosion is in many cases not included.
  • Any pre-existing damages such as wear and tear of any other defect.

why home insurance from policybazaar

Who Should Buy a Home Insurance?

Home insurance is meant for anyone who has a home whether own or rented. There is myth that only home-owners should buy a home insurance plan. Let us tell you case of Mr Vijay Rao and how having a home 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 a home insurance policy and he could manage to settle back to normal life again easily and without any financial stress.

It’s a misconception that only house owners should buy a home insurance. Although, house may belong to a landlord but it has contents which belong to you. Irrespective of the fact that whether you are a tenant or owner, buying home insurance should be your top priority.

Even, there are various insurance companies which provide exciting discounts to people who have bought over 3 home insurance covers. However, don’t let discounts make you buying those covers also which you don’t need. For instance, if you are a landlord then avoid buying a policy to cover contents of the house. Leave that to the tenant. Companies also offer discounts if you buy it for a long duration. You can insure the house for up to 10 years, which not only gives peace of mind but you also get a chance to earn lucrative discounts.

home insurance claim

How to File for a Home Insurance Claim?

Almost every insurance company is having its own 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 insurance company. Apart from FIR report, the other documents which you need to submit are-

  • Fire brigade report
  • Medical Officer’s Certificate for death or disability
  • 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. Click here To Read to Make Your Home Insurance Claim Easier 

home insurance premium saving

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 equipments 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.

home insurance benefits in policybazaar

Get Ready, Get your Home Covered at PolicyBazaar

From free home insurance policy quotes to comparison 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 insurance providers has perplexed you, then talk to our customer support staff who will guide you on all aspects of home insurance.

It takes years to build a house so extend, its life with a right home insurance plan!

Written By: PolicyBazaar - Updated: 06 February 2020
Q:

What is home insurance?

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.
Q:

Why should I buy home insurance?

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.
Q:

What are the perils covered under home insurance policy?

Ans:

Home insurance offers protection against both natural and man-made calamities. Mainly, it safeguards your house from-

  1. Lightning
  2. Fire
  3. Flood
  4. Earthquake
  5. Riot/strike
  6. Cyclone
  7. Landslide
  8. Bursting/overflowing of water pipes, tanks
  9. Leakage from automatic sprinkler installation
  10. Damage caused by vehicle of a third party
Q:

What perils are not covered under home insurance policy?

Ans:

Home insurance policy doesn’t offer coverage to kutcha construction and under construction building. Some of the other exclusions of the policy are-

  1. Loss/damage caused by war or terrorism activity
  2. Loss/damage caused by radioactive contamination
  3. Loss caused by pollution/contamination
  4. Destruction caused by wear and tear of the house
  5. Any loss/damage caused in residence-cum-shop
  6. Any loss/damage caused in residence-cum-office premises
  7. Loss of cash, cards or other documents
  8. Painting, antiques
  9. Loss or damage caused when the house remains unoccupied for a long tenure, usually a month.
Q:

What contents are covered under home insurance policy?

Ans:

Home insurance covers the following contents-

  1. Furniture
  2. Furnishing items
  3. Expensive belongings
  4. Precious items like jewelry, gemstones, etc.
  5. Electronic items like laptops, televisions, etc.
  6. Home appliances like refrigerator, washing machines, etc.
Q:

What is the tenure of home insurance policy?

Ans:

Usually, the tenure is of 1 year, but few insurers are offering plans up to a term of 30 years.
Q:

What do you mean by reinstatement cost?

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.
Q:

How is sum assured computed?

Ans:

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
Q:

How can I bring down home insurance premium?

Ans:

Methods that can prune your home insurance costs are-

    1. 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.
    2. 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.
    3. 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%.
    4. 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.
Q:

Is compound wall covered by home insurance?

Ans:

Yes, compound wall be covered by home insurance as long as it is not a kutcha construction.
Q:

Can I increase sum assured in my policy?

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.
Q:

Can I insure my house let out for rent?

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.
Q:

What is debris removal? Do insurance companies cover debris removal?

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.
Q:

Can an entire building or society be covered under home insurance policy?

Ans:

No, an entire society cannot be covered under home insurance plan.
Q:

Is FIR necessary for home insurance claim?

Ans:

FIR is mandatory incase of riots, burglary, strike, malicious damage, terrorism and larceny. However, it is not necessary in following situations-

    1. Flood
    2. Earthquake
    3. Storm
    4. Lighting

Impact damage due to accidental losses
Q:

When does the insurance cover start?

Ans:

Insurance coverage will start from the time your payment is received by the insurer.
Q:

What happens to the home insurance policy if I sell my house?

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.
Q:

Can I take home insurance policy from 2 companies?

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.
Q:

Can I make a claim on my partially damaged home?

Ans:

Yes, you can make a claim on a partially damaged home.
Q:

What is the procedure to make a claim on partially damaged house?

Ans:

Make sure you follow below steps to make a claim on partially damaged house-

  1. 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.
  2. After receiving claim form and requisite documents, a surveyor, appointed by the insurer, will visit your house to assess damages.
  3. The surveyor will file a report on the basis his findings. Based on his input, insurer will either accept or reject your claim application.
  4. 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.
  5. After receiving bills and receipts, net liability will be computed on the basis of surveyor’s recommendation and applicable deductibles.
  6. 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.
Q:

My house is damaged due to fire. Can I go ahead, do repair work and then send bills for reimbursement to the insurance company?

Ans:

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.

  1. Inform the insurer by calling customer support number or via email.
  2. 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.
  3. 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.

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