Understanding home insurance terms is important to make an informed decision and can be invaluable at the time of a claim. But we don't want you to waste time looking for resources to help explain these terms to you, considering your busy routine. So, we've complied a comprehensive list in this article. You can just sift through this write-up once and get a good knowledge of the terms used in your home insurance policy.
A home insurance policy is an investment that can take care of your finances in case your house and/or its contents get lost or damaged due to natural or otherwise unplanned events. The coverages provided by Bajaj Allianz's home insurance policy are:
- Loss or damage to content
- Loss or damage to portable equipment anywhere in India
- Loss or damage to jewellery and valuables
- Loss of or damage to curios, works of art and paintings
Besides these coverages, you can also opt for various add-on covers to enhance the coverage of your base plan.
Here is the complete list of the terms used in home insurance policies that will help you to understand your home insurance policy once and for all:
Sum Insured (SI) is the monetary amount shown against each item under your policy document which shall be insurer's maximum liability. In simpler words, it is the maximum amount that your insurer will pay you (if you file a claim) in case your house and/or its contents get lost/damaged due to natural calamities like earthquakes, floods, fire etc. and unfortunate incidents such as theft and burglaries.
Home Insurance Premium
Home insurance premium is the amount that you, the insured, have to pay to your insurer in lieu of the financial protection it provides to your house and/or its contents. The premium amount has to be paid annually and is based on the following factors:
- Sum Insured
- Age of your home
- Coverage selected
- Type and amount of risk
- Type of your home
Policy period is the period commencing from policy start date and terminating at midnight on the policy end date as specified in your policy document.
In the event of loss, there are four ways in which your insurer can settle your home insurance claim:
Indemnity basis: This type of loss settlement reimburses you the claim amount after deducting the cost of wear and tear of your property and/or items.
Reinstatement basis: With this type of loss settlement option, your insurer will replace your damaged (insured) property and/or items with a new one, which is similar to the one damaged.
Agreed Value basis: The reimbursement done by your insurer in this type of loss settlement is as per the value agreed by you at the time of purchasing the policy. An important point to note here is that, this reimbursement will not consider the current market value of your home and/or its contents.
New for Old basis: With this loss settlement option, when an item is damaged beyond repair, your insurer will pay out for the replacement for the same in full.
We hope that this 4-minute read would have simplified the complicated terms used in your home insurancepolicy. You can now save a lot of your time by purchasing/renewing your home insurance policy online. Visit our website to get the best deal on home insurance and enjoy quicker purchasing & renewal process of your home insurance policy and hassle-free claim settlement process.