Understanding what is home insurance
with thorough research and deciding on getting one for your humble abode is a great initiative for you and your family. However, before you finalize the insurance policy, you should research the types of home insurance. This will help you articulate your requirements and find the right insurance cover that fits your needs.
The Basics of a Home Insurance Policy
Home insurance will help your savings from getting eroded if your house faces a natural calamity, gets torched in a civil riot, or is damaged by accident. Such instances are often unforeseeable and hence can cause sudden financial distress. If your home insurance policy covers the particular incident, you will get compensated as per the dues listed in your policy.
Types of Home Insurance Policies in India
Fire Insurance is one of the most common types of home insurance policies in India. However, the Indian home insurance market has to offer several other policies with more home insurance benefits
- Structural Cover: This is the most standard form of an insurance policy. Such policies cover the structure of your home in case it gets severely damaged. The policy will usually cover the costs you might have to incur to reconstruct or repair the damaged part. Such policies are frequently acquired with add-ons that give coverage to supporting structures like post-boxes, backyards, distant garages, etc.
- Home Content Cover: Home Content Cover, as the name suggests, provides coverage to the contents within your home. This generally includes your furniture, movable & immovable electronic items, and valuables like jewellery. The caveat here is that you should be the owner of the asset insured, and it should be a result of a deliberate attempt to damage it at your hands.
- Fire Cover: Other insurance policies are differentiated by 'what is covered by the policy.' Fire Cover gives you coverage against a common source of damage – fire. Incidents like unforeseeable natural calamities and accidents are covered under a fire insurance policy. It can be used to get coverage for your home, its contents, or both. You can also get fire insurance for your goods stored in distant warehouses with fire insurance policies.
- Public Liability Cover: Assume a situation – Raj visited his friend Mohan’s new home. Mohan had saved up some money and bought an old apartment. He was yet to make the necessary repairs in the apartment but had moved in and called Raj for a nice evening at his place. Raj bought his new PlayStation for the evening. He placed it on the center-table in the dining area and suddenly heard the noise of a crash. A big chunk from the roof had fallen on his PlayStation, leaving it well-damaged. If Mohan has a public liability cover, he might get compensated for the damage caused to Raj and hence cover any liabilities he has towards his friend.
So, when unforeseeable damages are caused for any reason inside your home or in the premises of your legally-owned area, a public liability cover will compensate you to a large portion of the hence due expenses.
- Theft Cover: This particular variant of home insurance covers any damages you might have incurred because of theft. It compensates you for any stolen goods and valuables, as far as they are covered under the policy and your insurer can ascertain their value.
- Landlord’s Cover: This is ideally a cover meant for landlords. It gives cover to your building’s structure and contents, even if you are not living in it. It can take away a major source of headache since you can never be entirely sure how your valuables and building are being handled. As far as you own the content and the building, you can get compensated for the damages.
- Tenant’s Cover: This covers only the contents since tenants do not own the building's structure. However, as a tenant, you should consider renting an apartment or a house covered by the landlord's insurance. This would save you from potential tussles with your landlord if the property or its contents or both incur some damage.
How to Choose From the Various Home Insurance Policy Types?
Exploring a wide range of home insurance
policy types can help you make the right decision, but it can also be a confusing experience. Answer these questions, and you will have a good idea about which insurance policy will work for you:
- Which assets do you want to cover on?
- Who owns the assets you want to be covered?
- Which are the most likely scenarios you believe can cause damage to your home or its contents?
- How valuable are these assets for you?
- What is the best type of home insurance policy?
Generally, a comprehensive insurance policy gives you the maximum range of benefits.
- How Much Home Insurance Do I Need?
Calculate the cost of rebuilding, cost of the assets, cost of temporary alternate living, public liabilities, and the deductible on your insurance. Add these up, and you will have a reasonable idea about the amount of insurance you need.