Ajay and his family of three have recently moved into their new home. Ajay’s neighbor suggested that he must get a good home insurance policy. He’s concerned that this policy might just become an expensive liability for him; he has to think about saving up for other expenses like his children’s education, paying off his mortgage, etc. His wife, however, feels that home insurance is a very good idea to feel safe and secure in their own home.

Do you think Ajay should get a home insurance policy? What are the advantages of having your home insured? What are the options for Ajay to choose from?

Getting a good home insurance policy is always a good idea. As Ajay’s wife rightly put it, this policy will ensure protection against threats such as fire, earthquake, burglary and more. It’s better to not wait for such situations to arise before thinking about investing in an insurance policy, and stay steps ahead.

Before getting into what policies one could opt for, it is important to understand what home insurance policies are. These policies provide comprehensive financial coverage for damage caused to one’s home. This could be man-made or natural disasters. A number of policies provide additional covers like Theft Cover, Earthquake Cover.

In case one’s home has experienced damage of some kind, the payouts from these policies have been very helpful in rebuilding what has been lost.

Here are the top three policies every home owner should consider:
1. Bajaj Allianz My Home Insurance All Risk Policy:

This is one of the most comprehensive policies which covers all kinds of unforeseen mishaps. This comes in three different plans: Indemnity Basis, Retirement Value Basis and Agreed Value Basis. All these plans cover risks like fire, burglary, natural calamities, and more.

Eligibility

  • Occupants and owners of the flat, house or apartment who is aged less than 30 years.
  • Occupants and non-owners (or tenants) of a residential property can insure their contents within the home.

 

Features

  • It provides complete Protection for properties, contents, individual and family members’ interests.
  • This also ensures protection against burglary, fire, natural disasters.
  • This also provides benefits for renting an alternate lodging.
  • There is also protection of valuables like jewelry, art, etc.

Period

1, 2, and 3 years.

Add-ons

There are a few covers that are included with this policy:

  • Loss of rent
  • Public liability
  • Robbery during ATM withdrawal
  • Temporary resettlement
  • Lock and key replacement
  • Insurance for dogs
  • Compensation for employees
  • Loss of wallet

Exclusions

There would be no payouts in case of:

  • Pre-existing damage to property.
  • Information not disclosed or misrepresentation about any material.
  • Defects in manufacturing in mechanical, electrical and electronic items.

2. Bharti AXA’s Smart Householders Package Policy:

This policy is a result of a joint venture between AXA Group and Bharati Enterprises. This policy covers the policyholder, the spouse and a maximum of two children (23 years or below). This policy is good for those worried about fatal accidents that may lead to disabilities.

This policy comes in a two-fold structure:

  • Basic Cover which is a cover against damage caused due to fire to the building and/or its contents.
  • Basic Cover and Burglary Cover which covers for fire damage to the building as well personal content, fittings and fixtures.

Eligibility

  • Covers the owner, spouse and two children within the age of 23 years or bellow.

Features

 

  • Covers the building structure, fixtures, fittings, etc., against damage caused by earthquakes. This also covers sewers, waterlines, cables, drain covers, and other underground utilities.
  • Covers any improvement or alternation work on the structure. This should not exceed 10% of the insured sum.
  • Contents inside the building structure in the form of furniture, appliances, sanitary ware, etc., against theft, earthquake and fire.
  • Covers cost of fire extinguisher, damage to lock and keys due to accidents and tenant fixtures.
  • Protects jewelry, valuable documents like passport.
  • Covers damage to appliances and furniture during any move to a new home.
  • Up to three pedigree pets are also covered and compensated for in case of death or theft of pets.
  • Covers legal liabilities to domestic help and third parties.
  • Compensates in case of loss of rent if the house is deemed unfit for occupation.

 

Add-ons

There are a few covers that are included with this policy:

  • Domestic Appliances Cover
  • Terrorism Cover
  • Jewelry and Valuables Cover

Exclusions

There would be no payouts in case of:

  • Misrepresentation or exclusion of information as mentioned in the specific policy plans.
  • Loss or damage to items covered as mentioned in the policy.
  • Willful negligence by the policyholder or the insured or the occupants of the home.

3. Cholamandalam Home Insurance Policy:

This insurance policy goes a step ahead and offers coverage for not just the home and its contents but also jewelry, holiday cancellations and personal accidents.

Eligibility

  • Tenants occupying a rented apartment/flat/home
  • Home owners

Features

  • This policy covers the building structure as well as the assets or contents that are inside.
  • This provides protection for valuables like electronic appliances, art work, jewelry and anything that the policyholder lists out.
  • This policy can be taken up irrespective of one living in a rented space or in their own home.
  • This provides easy online application option for home owners to save time and effort when signing up for the policy.
  • Depending on the nature of the plan selected, this policy will protect one against theft, terrorism, fire, and more.

Add-ons

Provides covers for the following:

  • Damage caused through acts of malice or terrorism.
  • Explosion, fire, damage to aircraft (resulting in accidents)
  • Natural disasters like hurricane, tempest, flood, cyclone, earthquake, and so on.
  • Missile testing operations
  • Damage caused by vehicles or animals
  • Underground utilities that are damaged due to overflow of tanks, pipes, etc.
  • Burglary and housebreaking (the policy covers the loss of contents in this case and even compensates in case of damage caused due to attempted break ins)

Exclusions

There will be no pay out in case of:

  • Loss or damage caused by depreciation of assets resulting in wear and tear.
  • Loss or damage caused from war, foreign invasions, etc.
  • Loss or damage caused due to pollution or contamination.
  • Loss or damage caused by nuclear warfare, weapons, radioactive contamination or any toxic components as such.


But before you jump into action, it is important to keep a few important points in mind. Here are some such vital pointers that you must remain heedful about when investing in a home insurance policy:

  • Insurance Company’s Reputation: There are many companies out there offering home insurance. It’s important to research their customer support history, ability to resolve insurance queries and the time taken to do so. It would be good to talk to a few customer service representatives to get an idea of how well they handle their customers.
  • Claim Settlement: It’s always a good idea to assess what the turnaround time is for claim settlements. Check the settlement record history of each company before choosing the policy.
  • Premiums and Covers: One needs to understand and evaluate the possible risks that the home can face. It will be dependent on a number of factors, primarily to do with the location of one’s home: for example, the Cholamandalam plan has extensive coverage, including acts of terrorism. Decide on the budget and accordingly check for what each policy covers. Accordingly, decide if the premium is suitable and compare with other policies that have similar premium quotes.

A home insurance policy is a wise long term investment to ensure security against things one cannot predict. It’s always better to be prepared now than be sorry later.

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