Benefits Of Home Insurance: Who Should Get One

Posted on: Jun 26, 2020 | 3 mins | Written by: HDFC ERGO Team

Benefits Of Home Insurance: Who Should Get One

Q: How is the home insurance premium calculated?

Home insurance premiums are calculated based on factors such as property location, total insured value (property and contents), coverage amount, and additional riders.

Q: Is having a home insurance policy mandatory in India?

No, homeowners are not legally required to have home insurance in India. However, it is highly recommended as it provides financial protection against various risks and may be required by lenders for home loans.

Introduction to Home Insurance

People in India tend to view home insurance as an unnecessary extra cost. However, there is an assumption that purchasing a home insurance policy is just as challenging as getting a home loan.

Generally, this happens due to several factors, including a lack of education about the policies available, the widespread belief that insurance policies are too complicated and costly, risks associated with the claim process, and so much more.

However, home insurance policies are a type of property insurance that protects the policyholders’ property. Having home insurance helps you with the necessary coverage required to protect your property in the event of a damage or accident. Usually, 3 types of property insurance are available, you can choose what suits your needs the best Take a look.

1. Homeowners Insurance

Property owners need to protect their homes on the outside as well as on the inside. This insurance is a comprehensive plan covering almost all aspects and damages. In such covers, homeowners can expect the following benefits:

• If the homeowners are planning on not living for long in the house, they can customise their insurance tenure and save on the premium.

• Value-added services in the form of discounts.

• The contents of your house can be under the protection of a substantial amount without giving a list of the possessions.

2. Renter’s Insurance

A renter’s insurance mostly protects the tenant’s belongings in the rented space. Furthermore, on certain occasions, the renters themselves as well as their family members can avail of protection. Under such plans, tenants can expect the following benefits:

• Your personal items in the rented house are covered and protected against damage.

• Such policies are affordable and flexible.

3. Housing Society Home Insurance

This is more of a collective insurance taken up by big communities and housing societies that seek complete protection against multiple factors. Such policy offers the following benefits:

• The society is completely secured under one insurance policy while you receive big discounts on the premium.

• Such insurance covers common amenities like club houses etc.

• Societies can choose their coverage amount based on the size of the property.

Who Should Get Home Insurance?

A home insurance policy can only be easily obtained if individuals meet certain requirements. Although this rule may differ from company to company, people who must get home insurance include:

1. Property Owners and Landlords

To protect against certain risks like fire, natural disasters, theft, and other unanticipated events, everyone who owns a residential property, be it a villa, apartment, or standalone house, should have home insurance.

2. Residents in High-Risk Areas

People who live in areas that are vulnerable to floods, cyclones, or earthquakes should make sure their property is covered by sufficient insurance.

3. Tenants

To protect their personal items while staying in the rented house, tenants can get home content insurance.

4. Individuals with High-Value Items

To protect costly personal belongings like jewellery, artwork, and technology, homeowners or renters should get home content insurance.

Why Buy Home Insurance?

Natural disasters like earthquakes, floods, and cyclones are common in many areas of India. Moreover, there are various instances of thefts/burglaries, fires, accidents, vandalism, and riots as well. Therefore, in order to get coverage in man-made hazard cases, damage to personal belongings, and the other risks mentioned above, individuals must purchase a home insurance policy.

Benefits of Home Insurance

Home insurance can be a lifesaver in an emergency. Listed below are some of the house insurance benefits that you get upon buying a policy.

1. Comprehensive Protection

In addition to your house, you can also insure other structures, like a garage, shed, or compound. Today, insurance companies also provide additional coverage (content insurance), to shield your valuable possessions, including electronics, furniture, and appliances.

2. Includes Replacement and Repair Costs

Home insurance not only keeps your financial stability guaranteed, but your belongings are also covered in the event of damage or theft. The policy will cover the repair and replacement costs.

3. Keeps You Covered Throughout

Home insurance keeps you covered throughout since it pays for your short-term living expenses. It covers your rent or hotel bills as well, in case your house is not in a good state to reside in due to an accident or unfortunate circumstance.

4. Protects Against Liabilities

Your home insurance policy will cover any legal fees or damages that may have occurred as a result of an accident on your property. This is especially helpful for landlords. For instance, when a fire starts in your house and quickly spreads to your neighbour’s, or when someone in your family or the community has an accident on your land.

FAQs

1. Is a home insurance policy costly?

No. Home insurance policies offer cost-effective protection. There are several providers like the HDFC Ergo that offer comprehensive coverage at a reasonable premium rate.

2. How is the home insurance premium calculated?

There are several factors that determine your home insurance premium. Some include the property location, the total insured (the value of the property and its content), the amount of coverage, extra riders or add-ons, etc.

3. Is having a home insurance policy mandatory in India?

Although homeowners are not mandated to purchase home insurance by law, it is strongly advised that they do so. A home insurance policy may even be required by lenders when you apply for a home loan.

Conclusion

Summing up, it is wise to get house insurance in India. This is because of the high likelihood of property damage. Being a property owner, you can rest easy knowing that your investment is well-protected by insurance, which also covers a variety of potential losses.

All at a reasonable price, a home insurance policy from a reliable Insurance provider protects your financial investments against a wide range of risks, keeps your valuable possessions secure, provides liability coverage and offers peace of mind.

Yet again, make sure you understand the terms and conditions thoroughly before signing on the dotted line.

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

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