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Do Indians Think That Home Insurance Is Important?

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Published on May 19, 2021. EST READ TIME: 3 minutes

For most of you, having a home of your own is of prime importance. Setting up a home and decorating it according to your preferences or those of your loved ones is a dream come true. It is a once-in-a-lifetime opportunity that consumes a substantial part of your financial resources. You are also concerned about maintaining your home in good condition by using the latest products.

However, getting home insurance maybe the last thing on your mind. Not only you, but the vast majority of Indians, do not think it necessary to have their homes covered under a policy.

In recent years, there has been an increase in the number of home buyers in India. There have also been several natural disasters like earthquakes, floods, etc. The most recent incidents were the devastating Kerala floods in 2019 and the Uttarakhand floods in 2018.

Despite these disasters, the penetration of home insurance in India is extremely low at less than 1%. According to Swiss Re’s 2015 Property Protection Gap study, the premium collected from home insurance accounts for only 2% of the total premium collected by general insurance companies. Let us learn more about the reasons for this poor penetration.

Reasons behind the Slow Growth of Home Insurance in India

According to industry experts, the main reasons behind the low penetration of home insurance in India include:

• Lack of awareness There was a survey report published in 2017 about IRDAI’s (Insurance Regulatory and Development Authority of India) insurance awareness campaigns during 2010-2015. According to the data, only 36.6% of the urban Indian population and 29.7% of the rural Indian population were aware of home insurance. The figures did not confirm that those who were aware of home insurance would purchase or were interested in buying it.

• Common myths There is a widespread misconception that home insurance is expensive and involves a complex process. This is not true. Depending on what all you want to insure, the annual premium can be as low as Rs 2600.Long-term policies also qualify for discounts.

• Claim settlement apprehensions People have an apprehension that their claims will not be settled. On the official websites well-known insurance providers, you can compare the claim settlement ratios.

• Lack of promotion Insurance companies must do more to promote home insurance policies. A more efficient distribution channel is required. Banc assurance partners can provide their support in this project or insurers can tieu p with Real Estate Regulatory Authority (RERA) to provide home insurance to buyers of apartments.

• Expecting government assistance

Individuals anticipate that the government will compensate them for their losses. Given India’s huge population and the increasing size of cities, it would only add to the government’s financial stress.

Why do you need home insurance?

• Natural disasters: Most of India’s landmass is prone to earthquakes and other natural calamities. You should get a home insurance to prevent heavy expenses on repairing your house post a natural disaster.

• Dense population: Most of the cities are highly populated and lack good architectural standards. In case of any structural damage to your house, a home insurance will cover the cost of repair.

• Non – conformity to rules: A large number of residential and commercial establishments do not follow the safety guidelines specified by the government. This puts them at a high risk of natural and man-made damages. This calls for a need to secure your house with a home insurance.

Who can get home insurance in India?

Home insurance in India is available for all homeowners. Tenants can also buy a home insurance policy. Organisations can buy home insurance if they own properties used for residential purposes by their partners or employees.

The benefits of home insurance include:

• Coverage for any structural damage to your home

• Coverage for electronic goods and other household contents

• Rent payment for up to 6 months for any alternate accommodation while your house is being restored.

Conclusion:

Due to a lack of awareness and misinformation among the majority of the population, the home insurance sector in India is growing at a very slow pace. The scenario is nearly identical in both rural and urban areas. A home insurance policy can help you to cope with the financial stress if your home is damaged due to a natural or man-made disaster. Both insurers and the government have a lot of opportunities to make home insurance affordable to the mass and contribute towards the growth of this sector.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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