An ultimate guide towards home insurance plans

Posted on: Sep 23, 2021 | | Written by:

An ultimate guide towards home insurance plans

Published on September 20, 2021. EST READ TIME: 3 minutes

Home insurance policies and their importance are often not much talked about. So, let us understand more about home insurance and how they work.

The importance of home insurance

A lot of people tend to think of home insurance as luxury. But that is a myth that should be debunked. People work a lifetime to build a home of their dreams. Thus, your home is one of your most important assets where a lot of money is invested. Damage to your home and its properties can incur huge repairing costs. And having to pay this can dent a huge hole in your pocket.

A home insurance plan essentially requires you to pay a small amount of money, known as a premium. In return for this home insurance premium, the insurers provide coverage for your losses/damage in your home.

Different types of home insurance:

There are different types of home insurance policies available in India.

1. Standard Fire and Special Perils Policy

This is a very common policy offered by most insurers. It provides coverage for damage due natural calamities like earthquake, flood, storms, etc. It also covers damage due to explosions, riots, strikes, landslides etc.

2. Home Structure Insurance

This type of policy provides coverage for all structures in and around your house. This includes any repairing or remodelling that your house might require.

3. Liability coverage

A policy that includes liability coverage will cover for the damage/loss that any third party experiences within your property.

4. Theft and Burglary

In case there is a theft or burglary in your house, there are home insurance policies that can provide coverage for that as well.

5. Content Insurance

Home Content insurance only provides coverage for all the items within your house. This includes furniture, appliances and other household items.

6. Landlord's Insurance

If you rent out your house, there is a huge amount that goes into maintenance costs monthly. Landlord's insurance plans cover for all such costs. These plans have a coverage that also includes premature loss of rent, public liability etc.

Home valuation

Every homeowner must have home insurance coverage that is adequate for their entire home. For this, it is important to calculate the valuation of your property before opting for an insurance plan. Here are some factors that determine the value of your property and subsequently, the insurance coverage cost.

1. The reconstruction cost of your entire home, in case it needs to be rebuilt entirely again.

2. Type of insurance you want - building coverage, contents coverage or both.

3. The value of the contents inside your home matters as well.

Premium calculation

Once you have the home insurance coverage cost figured, you can also calculate the premium. It is usually based on:

1. The total coverage amount that is required.

2. The added cost of insured household items and belongings.

3. Any add-ons like coverage against acts of terrorism.

What is covered?

Now, the big question is 'What all do home insurance plans cover?'. Here is the answer to that. The following coverage is provided by home insurance policies.

1. Loss or damage to your house

Home insurance policies cover any damage caused to your house and structures around it. This includes your roof, garden, pool, fence, kitchen, bathroom, rooms etc. Although the damage should be done due to covered causes. Some covered causes include flood, earthquake, pollution damage, natural damage caused over time, deliberate damage caused by third parties and damage caused due to organisms (birds, animals, insects).

2. Temporary habitation costs

Repairing your home takes time. Until your home gets repaired, you may need to rent a temporary living space. Home insurance plans cover these temporary living costs as well.

3. Damage to belongings

Home insurance plans don't just cover damage to your property, but also your belongings. This includes clothes, furniture, appliances etc., in case they are stolen or damaged.

4. Personal liability

It's a great feeling to invite friends, family and acquaintances over to your home. However, there are chances that your guests might accidentally hurt themselves within your premises. They can hold you responsible for their injuries/damage. This becomes a personal liability. If your home insurance plan has liability coverage, then it pays for all the medical expenses of your guests as well.

Conclusion

Buying a home insurance policy provides coverage for your home, in case of damage or theft. Home insurers also provide liability protection if any person gets injured inside your property. All of these benefits in return for a small amount of premium does make for a good deal! Check out HDFC ERGO’s home insurance plans and get the one that’s perfect for your home.

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

A Guide for Homeowners to Stay Safe from Home Title Theft

8 Steps to File a Home Insurance Claim.

What is Business/Commercial Property Insurance?

What to look out for when buying a Home Insurance Policy?

What is the eligibility to buy home insurance