When you invest so much in buying a home – financially and emotionally, it makes sense to secure it with a home insurance policy. However, insurance is almost as complicated as real estate. Read on to find out what are the factors to consider before buying a home insurance policy that meets your unique needs.
The recent floods in Kerala are a stark reminder that property damage is a real
possibility. In cases of loss and damage, a comprehensive insurance policy can help
cushion the loss. Yet, a majority of people in India do not buy home insurance! The
reason – they think it’s expensive. According to a recent survey conducted by ICICI
Lombard General Insurance Ltd, 93% of the population in India did not have a home
insurance policy despite knowing its importance.
Don’t make this mistake. Get a policy when you buy a home. And here is what you
need to know before selecting one.
1. What’s in it for me?
Take a good look at the inclusions. Even now, a large community of homeowners
think that their home policy does not include cover for natural disasters. However,
this is not true in most cases. Today, many insurers give cover for calamities. For
example, if hailstorms break your roof you can generally file a claim. Even lightning
is now covered under many policies, without any extra deductibles.
2. What is covered?
There are two types of policies you can buy – one for the structure of the house and
one for what it contains. The first policy guarantees buyers with coverage for the
structure of a home comprising the structure in itself, and also permanent fixtures as
well as built-in items. This insurance is more important from the perspective of a builder. The other policy is more important from the perspective of a buyer because
there is cover for the contents of their home – which will include appliances, furniture
and so on.
3. What are the additional features I should look for?
Look for additional features that cover your unique requirements. For example, a
pools or a spa at home will need an endorsement – as it is called in the policy – which
translates to an additional coverage for these amenities.
4. Is it important to secure insurance for all disasters?
Disasters are unpredictable, and that’s the idea of insurance – you are covering any
kind of risk. It’s better to go for a comprehensive policy.
5. What can happen if I don’t purchase a policy?
Severe damage, such as gutting due to fire, or flooding can land you in a dire
financial crisis. Insurance provide you with a backup and offers peace of mind with
just a small financial outlay.
Buying insurance is a wise decision. Here’s a comparative analysis* of a few
insurers in India and the coverage offered by each of them to help you make an
|Company Name:||Plan Name:||Coverage:|
|Reliance General Insurance||Reliance Home Insurance Policy||· Includes destruction occurred due to natural calamities, accidents, burglary and so on.
· Gives a personal accident cover to the earning member and his/her partner
· Policy can promise a cover to the structure and one’s personal assets
|ICICI Lombard||ICICI Lombard Home Insurance||· Includes damage or loss because of natural and manmade calamities
· Policy buyers can opt amongst a structure cover, a content cover, or both
|The New India Assurance Co. Ltd.||Householder’s Policy||· Includes damage or loss because of robbery or in case of house breakage or fire
· Includes risks against the building structure and its contents
· Provides coverage for personal accidents, pedal cycles, public liability, and also guarantees baggage insurance
|HDFC ERGO||HDFC ERGO Home Insurance Policy||· Includes damage/loss because of fire and other related perils
· Includes damage due to theft and robbery
|Bajaj Allianz||My Home Insurance Policy,||· Includes damages caused due to natural disasters or man-made events
· There is an option to select either home/structure insurance, contents insurance, or both
* Disclaimer: This analysis is by no means comprehensive and readers are advised to talk to the respective company representatives to understand what the cover entails.