Over a 10-year period, is Home Insurance Really Worth it?

Natural and man-made threats like floods and theft aren’t uncommon in India; causing a serious setback to your house and budget. But with monthly premium instalments and other financial responsibilities, do you also feel that it may not really be that useful? Read on for some answers!

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Is Home Insurance Useful?

Like every insurance, the purpose of getting your home insured is to avoid any excessive financial burdens that may be caused due to unavoidable circumstances. There are different kinds of coverage provided under any home insurance; depending on your situation and needs you can pick a policy to secure the most likely risks. There are plans specifically offering coverage for home structure only, home components only or for both.

At a nominal premium, you can easily get reimbursements for losses caused by theft, burglary, fire and more. If you’ve opted for a plan covering the expensive components of your home, then you will be offered reimbursement or compensation for the damaged or stolen items as per your policy terms. There are also several plans available for homeowners as well as tenants, so that their homes are economically secure from any misfortunes.

How much will Your Home Insurance Plan Cost?

Depending on the value of your property and the kind of coverage you've opted for, your monthly premium can be as low as Rs. 200. At an affordable premium, you can easily avail of coverage against many 'Acts of God' that will protect you against losses caused by cyclones, storms and many other calamities.

For example, a property worth 1 crore in a metro city can cost you a monthly premium between Rs. 200-300. This premium can be bought for tenure ranging 1 to 10 years for a standard 1,000 square feet flat. If your house is smaller or the value of your property is lower, your premium would decrease too. In case of any damage or loss, your homeowner’s insurance will provide you with coverage up to 30 lakhs for a yearly premium of around Rs. 1800 - Rs. 3,600.

At such an affordable price, you can stay assured that in case of any mishap, you will be compensated for the repair or replacement of your home and home contents. Thus if you opt for a 10-year period, you will be a very small price to keep your property safe from horrible disasters such as floods, fire, theft etc.

Note: This is just an approximate figure, depending on the area of your house, the value of your property, location and age of your house, your monthly premium will vary.

Why do You Need Home Insurance?

From unexpected expenses due to seepage and fire to more severe damages requiring rebuilding, your home insurance plan has several uses:

Compensation for Losses

In case your house gets damaged due to natural disasters or other uncertain events, your insurance will provide you compensation in such scenarios. You can use this compensation for repairs or replenish the damaged items of your house.

For Affordable Premium

Among the most affordable insurance policies, your home insurance plan can be easily bought at an affordable premium that covers losses up to 40 lakhs. As discussed in the example earlier, a monthly premium starting at Rs. 200 can cover some major expenses that will cost you lakhs. This means, at an annual cost of 2,400 you get coverage for losses caused by fire, earthquakes, explosions or implosions, lightning, and many more.

For Coverage beyond Home Structure

Benefits of your home insurance are not limited to your home structure only; the benefits can be extended to the contents of your home as well. Important valuables such as home theatre, valuables, furniture, jewellery, etc. It also offers a lot of additional benefits through several add-ons. Some of the most popular additional coverages include cover for loss of rent, rent for alternate accommodation, personal accident, etc.

Protects against Legal Liabilities

In case someone gets injured in or around your house and files a legal case to claim hospitalisation or nursing expenses then your homeowner's policy will cover the cost for these medical and legal expenses.

Available for All

Not just homeowners, but tenants too can avail the benefits of this insurance. Many insurers in India offer plans for people living in rented accommodations. This is because a home is a significant property for all and they consist of hard-earned contents including furnishings and other valuables. You don’t necessarily need to own a home to secure your place!

One important thing to remember about home insurance is deductible. In the case of home insurance, you can lower the cost of your premium by opting for a higher deductible. However, it is important to pick the right deductible value so that you can easily afford to pay that deductible without compromising your finances.

Wrapping it Up,

Insurance for homes can be bought for varying durations. Depending on the risks, you can protect your home as well as its belongings so that you don’t incur unnecessary expenses. In case of misfortune, your policy will help you cover these damages so that you don’t need to start from scratch.

Written By: PolicyBazaar - Updated: 10 March 2022
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.