1. Home
2. Blogs

Understanding The Differences Between Home Insurance And Property Insurance

• 
• 
• 
• 0
• 0

As the cost of properties is at an all-time high, it is only sensible to secure your assets from any unforeseen events or accidents. Securing your assets with home insurance or property insurance policies offers you complete peace of mind and compensation, should anything go wrong.

In India, a home or property is much more than just an asset. Multiple angles are attached, including financial, emotional, and social stability. This is why choosing a reliable insurance policy is vital. First, let’s understand how home insurance is different from insurance for property.

What is Home Insurance?

Home insurance plans, otherwise known as homeowner’s insurance plans, are designed to protect your house against potential risks. The plan holds good for apartments, houses that are built, rented houses, bungalows, and apartments. If any unforeseen events result in damages to your house, the plan will compensate you for the same.

As a seeker of a home insurance plan, you must understand and evaluate the value of your home and premiums for the insurance to avoid financial strain.

A home insurance plan is designed carefully to offer a wide coverage providing insurance holders a safety net in case of any unfortunate event. Here’s a list of perils when a home insurance policy can be claimed-

1. Damages due to fire smoke or explosion.

2. Damages due to natural causes such as storms, cyclones, lightning, etc.

3. Damages due to man-made causes such as riots, vandalism, theft, etc.

4. Damages due to collision of vehicles or even aeroplanes.

5. Damages due to the construction of roads or railways.

You might find yourself wondering: Do I really need home insurance? The answer is yes. A home insurance plan is important for several reasons. The primary reason is the incredible amount of time and energy that you would have spent in building the home. Irrespective of whether you buy an apartment or bungalow or build a house from the ground up, it requires a lot of effort. Thus, it is only sensible to secure your efforts and house.

Take a look at the list of everything that’s covered under insurance for your home and everything that is excluded:

Inclusions:

1. Fire accidents

Fire accidents are possibly the most disastrous for homeowners or tenants. While you deal with the mental agony, an insurance policy keeps you safe from financial agony.

2. Thefts and burglaries

In case of theft or burglary at your home, the insurance policy promises to compensate you for the financial loss up to the specified limit.

3. Electrical breakdown

An electrical breakdown can attract a sudden financial burden that can be handled smoothly with insurance.

4. Natural calamities

Natural calamities include floods and earthquakes that have the potential to cause grave damage to the home. However, with an insurance plan, you stay financially protected to overcome the damages.

5. Accidental damages

Whether you are a homeowner or a tenant, insurance provides coverage against accidental damage to your home.

6. Alternative accommodation

While the home you stay at becomes unfit to live in, you will be provided an alternative accommodation for the meantime.

Exclusions

1. Damages due to war

2. Damages during construction

3. Land cost

4. Wear & tear or renovation/modification

5. Third-party construction loss

6. Damages due to willful misconduct

7. Consequential loss

8. Old content

9. Precious collectibles like stamps, works of art etc

What is Property Insurance?

Now that the home is secured, what about the contents of the house? They can also be subject to damages due to a lot of the perils mentioned above. This is where a property insurance comes into the picture.

Simply put, it is a policy that secures various physical goods and equipment of a house or even a business establishment. It safeguards these goods and equipment from dangers such as theft, vandalism, fire, etc. Depending on what you are looking for, you can either opt for specific coverage or coverage for all risks.

Having a property insurance policy will protect you from any unforeseen financial losses that might arise from a property. Since properties can range either from a single-floor house that you have built or an organisation, there are different policy types for various coverages. Some of these popular insurance plans include:

1. Fire insurance policy

2. Homeowner’s insurance policy

3. Shopkeeper’s insurance policy

4. Office insurance policy

5. Tenant’s insurance policy.

Note- The inclusions and exclusions for property insurance are the same as the home insurance. You can refer to the above mentioned list of inclusions and exclusions.

What is the difference between home insurance and property insurance?

Though they might seem similar, home insurance and property insurance plans differ a fair bit from each other. A key difference lies in their ambit, indicating a wider aspect of property insurance and a specified meaning of home insurance.

If you want to know about property insurance plans vs home insurance, here is a list of differences between home insurance and property insurance:

1. Purpose

While a home insurance policy is predominantly for residential type of buildings, property insurance is usually used for commercial purposes.

2. Term

The home insurance policy usually ranges between 1 to 30 years, while the term of property insurance largely depends on the policy type.

3. Add-Ons

A major difference between property insurance and home insurance is the available add-ons. You can choose earthquake cover, debris removal cover, pets cover, leakage cover, and contamination cover as add-ons. For property insurance plans, you can choose from terrorism cover, mould and fungi cover, employees' property cover, escalation cover, etc.

Home Insurance vs Property Insurance: Which One to Choose?

Now that you understand property insurance vs. homeowners insurance, here are some tips to help you choose the right plan.

1. The first step is to understand the type of policy that is essential for your property or house. Once you know the right plan based on its coverage, it becomes easier to continue with the process.

2. Knowing your exact requirements such as the sum insured and the need for exact coverage will make the policy-buying process easier.

3. You can shop around to find a policy that fits your needs and budget at the same time.

4. Do not forget to check the claim history of the insurance provider that you are selecting.

5. By paying a small premium, you can choose add-ons to make the plan even more robust.

Frequently Asked Questions

1. Why do I need insurance for my home/property?

Owning a home/property insurance plan provides several benefits that promise both financial and mental peace. Home/property insurance is designed to ensure protection in case of unfortunate events, both man-made and natural, such as floods, theft, electrical breakdowns, etc., that can damage the insurance holder's home/property.

2. What is the difference between home insurance and property insurance?

Home insurance and property insurance appear to be the same. However, there are major differences between them, starting with the former being a specific insurance for dwelling construction while the latter has a wider ambit. Additionally, there are different additional benefits and tenures provided under home insurance and property insurance.

3. How do I choose between home insurance and property insurance?

Choosing the right insurance plan can become confusing with numerous coverage options offered for both homes and properties. To pick a plan that best suits your needs, you must first understand and evaluate the ambit of the plan, its coverages, additional benefits premiums and your budget, price comparison of various plans and ease of renewal.

4. What is the extent of financial coverage under home insurance and property insurance?

Insurance plans differ based on several factors. However, on average you can expect coverage up to ₹10 crores for home structure and ₹25 lakhs for your belongings under home insurance and coverage up to ₹25 lakhs under property insurance.

Conclusion

You must opt for a home insurance policy or a property insurance policy, depending on the type of building that you have. Since these assets cost a considerable amount of money, any maintenance or damages can be significant as well. Make sure you are opting for an insurance plan that matches your needs and financial capacities. Understanding property insurance policies vs homeowners insurance plans will further help you to pick the apt policy.

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

RELATED ARTICLES

Home Insurance in India: Cost and Factors that Influence The Premium

Home Insurance vs Home Loan Insurance: What You Need to Know

Property Insurance: Is It Mandatory or Optional In India?

Common Types of Property Insurance to Opt For in India

What Is Homeowners Insurance? Who Needs One?

---

• 
• 
• 
•