What to look out for when buying a Home Insurance Policy?
What to look out for when buying a Home Insurance Policy?
Home insurance policy provides the most amount of protection to you and your assets compared to any other insurance policy out there in the market. Broadly speaking, insurance policies for home cover damages to your home, any expenses arising out of injury to family members at the time such damage occurred, and home insurance even covers your liabilities from any accident or incident that occurs on your property. All of these points are covered in detail below.
Cover for Damages
When we think of home insurance policies and the value they add to our lives, we think of how it protects our home against extreme weather conditions, accidents, etc. But there are other types of loss, damage and adverse events that your home and its surrounding structures are susceptible to, which your home insurance is bound to cover. They are as follows:
1. Cover for structure
This is the most basic type of coverage offered as part of every home insurance in the market. It includes any damage or risk to the physical structure of your house or dwelling. It is important to note that cover for structure does not include the land upon which your dwelling is constructed. This type of cover includes electrical wiring systems, plumbing, heating and air conditioning and other systems or parts of your home that form the bare shell of the structure.
2. Additional Structures
Insurance policy for home also includes non-attached parts of your dwelling space, i.e. parts that are not directly attached to the main structure of your house or building. This includes garages, fencing, a shed, backyard, pool, garden area, driveway, etc. Any damage to any of these parts of your property are also included under home insurance coverage.
3. Personal Possessions
Cover for personal possessions is a variable part of home insurance cover. Items such as electrical appliances - television set, computers and laptops, kitchen appliances, washing machines, etc., decor and furnishing - furniture, soft furnishings, textiles, show pieces, etc. and even jewellery that forms part of your personal property within your home is eligible for coverage against damage, theft and other risks. Every insurance policy will place limits on the coverage they can offer for loss or damage to these items due to the third party causes.
4. Alternate Accommodation
In case of any severe damage to your home due to which you need to move out temporarily, home insurance policies will cover the expenses of alternate accommodation. This includes rent, food and travel expenses and other costs incurred by the insurance holder. It is important to note that the need to avail alternate accommodation should arise out of a cause specifically insured.
Cover for Liabilities
This type of cover under home insurance is lesser known but is an extremely valuable feature of home insurance policies. Cover for liability means that in case you have to cover expenses for any damage or accident that arises in or out of your property to any third party, your home insurance policy will help you cover those expenses.
Here are two examples to help you understand what would be covered under a Liability Cover:
Example 1: If you have an electric fence for security and the fence accidentally electrocutes the neighbor’s dog, the treatment and care of the dog owed by you to your neighbor would be covered under liability cover.
Example 2: If a relative or visitor is accidentally bitten by your security dog and suffers serious injury or if accidentally a coconut from a tree on your property falls on their head, the medical expenses arising out of such an accident would be taken care of by the liability cover of the home insurance.
Conclusion
Home insurance is an extremely valuable asset to have when you are a homeowner. We are accustomed to paying out of pocket for expenses arising out of damage or loss in our homes. But home insurance can help you subsidise these expenses and potentially save lakhs of rupees.
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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