Why should one have a home insurance policy in India

Why should one have a home insurance policy

The advantages of a home insurance policy are undervalued in India. Even though there has been a huge number of home buyers, it’s just now the number of home insurance policy buyers count is starting to increase in the country. People ignore this policy just because of the huge premium amount without understanding the actual features of the policy. 

Like other insurance policies, home insurance policy serves as a safety shield to your homes during any kind of disastrous moments. It could be any theft, fire accidents, or any natural calamities. 

Protection 

In recent times, you could have seen flood incidents in India. Many have saved a lot of expenses related to their homes that have arisen due to the flood. It’s during such situations that the insurance policies become much crucial. 

Structure coverage 

The coverage is presented in 3 ways, namely

Agreed value – It is a value including the land value, along with the construction cost of the building. 

Indemnity value – It is the market value of the house that includes the construction & depreciation cost of the building.

Reinstatement Value – It is the value of the construction cost for the house. 

In case an individual is applying for home insurance for his house, which costs 80 lakhs and the construction cost before years for the building is 50 lakhs. The reinstatement value for the policy is 50 lakhs, and if the policyholder opts for agreed value, then the cover amount becomes 80 lakhs. If the policyholder has signed for the insurance policy on the basis of indemnity value, the coverage provided is approximately around 45 lakhs ( 50 lakhs – the depreciation value for the home ). 

People residing in rented homes must know that they can only apply for the coverages against their own belongings and not for the structure of the building. 

Cover for personal belongings 

There is an option left for people by which they can insure their personal belongings in their house using home insurance policies. It can be electronic devices, furniture, jewellery and even artworks. The cover can be either account the depreciation value or even be presented in terms of the reinstatement value. The policyholder has to inform the insurance firm the content cover through bills and invoices. 

When the coverage is the reinstatement value, then the policyholder will receive the cash amount for the insured products without considering the depreciation and other wear and tear values. The reinstatement coverage may require costly premium amount to be paid, but is more advantageous than the other coverage types. Not all belongings of the policyholder could be qualified to be insured. 

Add-on covers 

There are several add on features that can be attached along with the regular home insurance policy. In order to attach one among them, the policyholder has to submit the value of their assets in advance. The add on cover added will decide on the premium amount of the policy. Under each add on option, there are certain coverage limitations. The limitations vary with respect to the insurance firm. There are even add on options available relating to the living expenses. If people aren’t able to stay in the house temporarily because of repair works, there is a cover provided. It depends on the duration and the number of people. 

Conclusion 

Looking at the benefits of the home insurance policies mentioned above, it is a clear picture that the policies are a great way for reducing financial expenses. Understand the terms of the policies before buying one. Consider all the factors involved in the insurance policy to make sure you pick the right one.

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