Types of Home Insurance Policy - Based on the Tenure
Based on tenure, home insurance policies are of two types. Below we have explained both-
Simple or Short-term Policies
These policies cover the home and its related contents between the tenure of one to three years. It gives your house structure and it is valuable comprehensive protection from risks like theft, damage, damage to personal belongings, accidental loss, and fire outbreaks. Under this policy, the tenure is shorter, but they are relatively affordable than the long-term policies.
As the name suggests, they are designed to cover your home for a long period. The policy period can be up to 30 years. It is also a comprehensive policy that offers coverage against all the major risks.
Moreover, you can buy add-on covers by paying an extra premium amount. However, the policy tenure is longer, so the risk increases. Therefore, the policies are relatively more expensive than the simple policy.
Which Type of Home Insurance Policy is the Best?
Now, you must be aware of the difference between both policies. While the simple policy premiums are affordable but if you want to increase the tenure, you will have to buy the same policy multiple times. If you choose a long-term policy, you have to renew it before the policy period ends, and there is no hassle of buying the same policy multiple times.
Do You Have to Renew Your Home Insurance Policy Annually?
We have already discussed this in the above paragraphs. To make it easier, you have to find the policy period of your home insurance policy mentioned in the policy documents. If your policy gives the home protection of one year, you must renew it annually. However, if it is a long-term policy, then you are free from the hassle of renewing the policy every year.
Why Should You Renew Your Home Insurance Policy on Time?
To answer this question, below we have given some benefits of renewing your home insurance policy on time-
- You save a lot by renewing your house insurance policy on time. If you do not renew it before the expiry date, your home insurance company will ask you to buy a new one, and it will be an expensive affair.
- Though your home insurance plan is non-transferable, your buyer will be in a relief zone after knowing the home insurance policy status. They will consider you as a responsible seller who never misses the renewal date, and it makes them feel that the home is free from damages.
- Renewing your home insurance policy on time makes you stay updated with your home and the value of its contents. During the renewal, there will be some form of revision of the valuation metrics, and it keeps you updated with the current price of your home, which can also assist you when you are planning to sell the house.
- The biggest and most important benefit is your home becomes secure for your future generation. Buying a house means a lifetime investment. Timely renewal of home insurance policy means your property is well-maintained and safe from several risks. Moreover, your future generation also relies on it and can avail yourself the benefits of ownership of a secured house.
Things Your Home Insurance Policy Renewal Dependent Upon
In India, several home insurance companies offer all types of plans online. To renew your policy, you only need documents like- identity proof, salary proof, tax returns, ownership proof, and previous home insurance policy documents. Here are certain points that you must keep in mind while renewing your insurance policy-
- The current internal and external condition of your house you are planning to cover.
- The depreciated and market value of all the house contents you want to cover in the policy.
- The financial background of the homeowner who wants protection cover for the house.
- The geographical location of the house. Your premium will rise if you are living in a natural disaster-prone zone.
- The criminal record of the house owner. If you have any criminal history, the insurance request will be denied by the home insurance company.
- The available tenure on the current home insurance plans.
The renewal of the home insurance policy depends upon the type of home insurance plan. If it expires in a year, then you should renew it a few months or a week before the annual date of expiry mentioned in the policy. In case you have a long-term plan, you are free from the hassle of annual renewal.
Written By: PolicyBazaar - Updated: 21 April 2022