Most of us invest a considerable portion of our savings and earnings into buying a house. After all, most of us also understand the pleasure and honour of owning a house where our families can reside. Now imagine one of these scenarios unfolding:
- An earthquake leaves major cracks in your home, and it has become uninhabitable. Your family is safe, but your savings now have to be lined up for repairs.
- A fire extended from your neighbourhood all the way to your house, and now it requires extensive repairs.
- When you were on your vacation, a burglar broke into your house and stole a sizable portion of your furniture, décor, and electronic goods. You had sensors and a CCTV camera, but these devices cannot help you recover your goods.
While these are stressful scenarios to imagine, they can practically become a part of anyone's home-owning experience. And that is why you should consider a comprehensive home insurance
What is Home Insurance?
Your medical insurance takes care of unforeseeable medical expenses. Your vehicle insurance takes care of unplanned repairs, damages, and even theft of the vehicle. Similarly, your home insurance plan covers the structure of your home, the additional structure around your house, and the contents in your home, depending on the policy you choose.
Instead of asking, 'What is house insurance?', your question should be, 'How can house insurance help me?' Here is what you should know about the various types of home insurance
- You got the coverage of home insurance even when you were not in the house when it incurred the damage. This can protect your house if you are going on a vacation or away from your home for a considerable time.
- Have you heard people ask the question, 'what is a home insurance policy in the face of an Act of God?’ The answer to that is – it is a shield that protects your savings. Unlike what popular opinion might say, home insurance policies cover your house from the Act of God, such as most natural calamities.
- Comprehensive home insurance plans can cover the contents of your house for years to come.
So, the answer to the question of what is home insurance is simple – it is an intelligent move that protects your savings from getting eroded when your house has incurred unforeseeable damages.
What is House Insurance - A Small Example
Experience Speaks for Itself
Dev Parmar worked in the state public service commission for over 30 years. He was considered one of the most prolific employees in the Public Works Department. Now that he was retiring, he wanted to use some of his provident funds to buy a house outside the hustle & bustle of the city. He paid the down-payment for a good countryside home that amounted to about ₹15 lakhs, a considerable amount for any middle-class family.
Young and Dynamic
One of his Dev’s neighbours was Jayant, a young-MBA graduate from Mumbai. Jayant had been a banker for five years, had written a successful fiction book, and had now planned to leave his job, depending on his royalties, and live outside the city with his wife and kid. He, too, had bought an identical town-house just beside Dev.
The Unthinkable Happens
That year, the Mumbai floods did not do justice to the ambitions of these two homeowners. Right after they got possession of their homes, a flood destroyed the entire township. Dev had a home insurance policy that covered a large extent of all the contents of the home and the structure of the home. He was able to recoup a good enough portion of his savings.
Cost of Not Having a Home Insurance Plan
Jayant was young and yet to see a lot of things. He had not taken a home insurance plan. He thought he shouldn't have to pay ₹10,000 in insurance premium
for his home just because there is ‘some risk’ of its damage. At the end of it, he ended up losing over ₹50 lakhs of his savings in getting the repairs and redecorating his house.
It is difficult to see what the future will have for your house. And that is why it might not seem obvious to buy a home insurance plan. But the very fact that you do not know what the future beholds is your hint for getting home insurance since it protects you from the unforeseeable.
- What is a Home Insurance Policy and What Are Its Types?
Home insurance policies tend to have some common variants:
- Comprehensive policies that cover both the structure of the house and the contents of the house.
- Policies that cover only the structure of the house.
- Fire Insurance Policies cover only the accidents caused by fire.
- What is House Insurance and How Long Does It Last?
A house insurance plan can range anywhere from 1 year to 30 years, depending on the type of policy you get.