Jun 21, 2012

Protect Your Home with House Holders Insurance

For most of us, owning a home is a matter of great pride. And while we often put our life’s savings into buying that home, we rarely realize that our home needs protection in the form of insurance too. However, since it is an important cover for everybody to have, here are some important details for you to know about home insurance. Importance of Home Insurance Your home is perhaps, the most valued possession in your life. It is, therefore, essential to take all precautions to protect this valuable asset. Despite the best security and fire protection systems installed by you, thefts can take place, and fires can still cause irreparable losses. But there are other risks as well such as natural calamities, and breakdown of domestic appliances due to voltage fluctuations. Insurance can play a vital role to reduce such financial losses. The householders’ package is a single policy that covers all major risks associated with home and its contents like jewelry, electronic items, TV, refrigerator, fragile items like plates, glass, along with the loss of baggage, personal accident and public liability against losses arising out of fire, burglary, and theft.  All policies cover calamities, such as earthquakes, by default. However, a cover against tragedy, such as terrorism, needs to be opted for additionally.  There are also pre-underwritten options of coverage and premium to choose from home insurance plans offered by insurers like Bajaj Allianz. Challenges Involved in Home Insurance Most people pay little attention to home insurance. And, while you choose the best accessories for your home, securing it should be of prime importance too. These days, banks offer home insurance as a bundled product along with your home loan. While this is a beneficial feature, one should understand what the policy covers and what it doesn’t. This is in addition to details, such as cost and what to do in case of a loss. Besides that, applying for a home insurance could be an extensive process involving a lot of details and paperwork. This, however, is slowly changing today with insurers offering simplified plans with convenient packages to choose from and fewer details to be provided. This has started attracting customers towards taking home insurance.  Determining home insurance A crucial aspect of your home insurance would be to assess the sum insured. While you spend thousands of rupees on accessories to enhance the aesthetic value of your home, you would be surprised to learn that the premium costs could be as low as Rs. 5 per day, in comparison to the total value of the property. It is, therefore, highly recommended that you buy this product after understanding all the aspects involved. Some thumb rules to assess your home insurance are as below –
  • The sum insured and home insurance premium depends on its current market value or cost of reinstating the same in case of a calamity. Hence, evaluation of the house is an important issue. It is common for home loan providers to insist on insurance for the loan amount, which is not right. What needs to be accounted for is the cost of construction only. This excludes land value, but includes the built-up or carpet area, apart from construction quality.
  • While deciding the sum insured, the area and location of the house are also considered. This is because sum insured is decided on the basis of reconstruction of the property which would differ from location to location. For instance, the cost of construction will be higher in metro city than in a small town.
  • For insurance of items such as electronics or jewelry, the declaration has to be made on actual basis, i.e. itemized. It is always better to prepare a list of such items to be insured. A valuation certificate of gold and other jewelry can some handy.
  • Always remember to insure contents for their present replacement value (new) as insurers reimburse without depreciation in case of repair/partial claims.
  • During the year, if you or your family purchases new assets such as electronic appliances or jewelry; you should inform your insurer, as these items can also be covered.
To know more about our House Holders Package Policy, click here.

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