You make a whole lot of investment in purchasing a home and you do not leave any stone unturned to make the best decision possible. Similarly, buying home insurance to protect that house is important but it can also be complicated sometimes because of a different set of clauses specified in the policy documents. This might leave you with a web of unanswered questions in your mind.
To make the best decision in purchasing a home insurance policy we have assembled 12 frequently asked questions that might help you with during the purchase of home insurance.
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Is it Compulsory to Buy Home Insurance Policy?
It is not compulsory to buy a home insurance policy for homeowners. Even there is no such compulsion by the Insurance Regulatory and Development Authority of India (IRDAI) and Reserve Bank of India (RBI) to buy a home insurance plan from the bank where you have applied for the home loan.
Therefore, the banks cannot urge you to purchase a home insurance policy from them only. In case you need a home insurance policy to protect your heavy possession? Then your answer depends upon your choice.
However, with the help of a home insurance policy, you get extensive coverage for any kind of natural disasters such as cyclones, earthquakes or landslides, theft, and many more.
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Coverage under Standard Home Insurance Policy
A standard home insurance policy usually covers four types of coverage which are as follows-
- Personal Property Cover-It covers all the personal articles and belongings inside the home.
- Liability Cover-It covers the bodily injuries suffered by any visitor who has been there in your house for the time being.
- Dwelling Cover-It protects the damages against your home's physical infrastructure.
- Additional Expenses Cover-Any extra living expenses that might come up if you are displaced from your house for a while.
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Eligibility Required to Buy Home Insurance
In India, an individual who is a homeowner or occupant of a property can buy a home insurance policy. Also, a person living in a rented apartment or a place can apply for a home insurance policy.
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Factors that Affect Premium of Home Insurance
There are a few factors that affect the price of a home insurance policy-
- Location of the House-If your house is located in a high disaster-prone area or an area close to the sea, there are chances you might get hit by storms, cyclones, tsunamis, etc., which affects the premium rates. Therefore, the house location will determine the premium for your home insurance.
- Structure of the House-Some of the impactful factors can be the structure of the house that includes roof type, wiring, age of the house, etc. All these factors lead to an increase in the price of the premium. Older the house means higher insurance price. Moreover, quality materials used in the construction like bricks, stone, wood can help you in lowering the house insurance premium.
- Credit Score-Usually, personal factors like your credit score or credit history will help in deciding the premium amount. We suggest you maintain a good credit score to avail of insurance at a lower premium.
- Installing Safety Devices-Installation of safety devices like a fire alarm, fire extinguishers, smoke detector, burglar alarm system, deadbolt locks, etc., will help you lower the premium amount.
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Documents Required for Raising Claims in Case of a Burglary
Here are the documents required in case of burglary claims-
Duly filled claim form with an FIR (First Instance Report), list of stolen items or cost of repair, and an original invoice of the value of the stolen item.
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Meaning of Liability Coverage in a Home Insurance Policy
All types of home insurance policies include liability coverage, which means you are protected in case any visitor or guest suffers an injury within your property and files a claim against it. It also protects you in case your child or any other family member damages your neighbour’s property while playing or doing random stuff.
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What Happens to the Home Insurance Policy When the Insured Home is Sold to Another Party?
In case your insured house is sold, the policy contract is cancelled at that very moment when the house ownership is transferred. Keeping the transfer process active, your balance of the premium for the remaining insured period shall be refunded by your insurer without any worries.
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After Raising Online Claim under Home Insurance
The moment you request a claim under your home insurance plan from an insurance company, a surveyor will connect you within 48 hours. Next, they will visit your place in the coming few working days to commence the actual claim process.
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Exclusions of a Home Insurance Policy
Some of the most common exclusions of a home insurance policy are as follows-
- It does not cover the damages caused to your pet, bird, or fish living in the house.
- Any damages to the house due to carelessness or reckless act, for example- loss due to leaked drainage system, surface water, clogged water or gas pipe leakage.
- Any damages due to war, riots, nuclear damage, etc.
- Do not cover any automobiles or commercial property damages.
Note-The policy has specific or limited coverage for valuable items like- jewellery, money, fine art, high-end sports equipment, securities, etc.
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Do Insurers Cancel the Coverage of an Active Home Insurance? If Yes, Then Why?
Yes, in some of the below-mentioned circumstances, your insurance company can cancel your existing home insurance policy-
- When you are unable to pay the premium amount on time.
- In case of fraud or misrepresentation of the information related to your house.
- Damages to the home due to any illegal or hazardous act like illegal possession of fireworks causing fire explosion.
- When the decision is made by the Insurance Commissioner for the discontinuation of the policy due to rules violation by the policyholder.
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Claim Settlement Process if the Insurance is Purchased from two Insurers
In such cases, you will be paid on a proportionate basis in the event of a mishap.
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Do I Need a Home Inspection Before Buying a Home Insurance Policy?
Yes, in most cases, the inspection is conducted by the insurer to access the risks in your home to calculate the premium amount. Therefore, you must clear all your gutters, check leak ceilings, gas pipelines, drainage system and other things before the arrival of the surveyor.
