Types Of Home Insurance Policies and Plans In India
While most of us buy a home insurance policy, we may not know which policy suits our needs the best. Here's all you should know about the different types of home insurance policies in India.
By Devishobha Chandramouli
A house is a costly asset. While we are ready to spend on its maintenance, buying a house insurance policy is deferred or stays an afterthought for many of us. However, it is an absolute must to buy household insurance. However, like property insurance, home insurance also provides additional liability insurance. Primarily, home insurance provides coverage for damage to the building structure and the contents within the house. However, there are many types of add-on covers available for extra protection, such as 'liability insurance coverage'. Including this rider in home insurance protects a homeowner from liability arising out of a third party suffering an injury or a loss while being present on your property. Here are a few more convincing reasons to buy a house insurance plan:
What is home insurance?
Home insurance, or homeowner's insurance, is a kind of insurance that covers the losses caused to a houseowner due to damage to his house, its contents and occupants.
Home insurance policies cover a wide range of damage caused by natural calamities like floods, earthquakes and landslides, and manmade disasters like fire, terrorist attacks, riot or any untoward incident on the property.
Together with covering the risks to the building structure and contents within it, a house insurance policy also covers other types of risks. These include protection against damage caused by tenants or caused to tenants on the property, burglary, rent expenses and so on.
5 reasons why you should buy home insurance
- Provides comprehensive protection: A comprehensive home insurance policy not only covers the building structure, but other structures in the compound as well such as the garage and outdoor rooms. House insurance also covers the contents of the home such as furniture, valuables, home appliances and so on.
- Protects against legal liabilities: Your homeowner's insurance policy will protect you from any legal or third party liability that may arise as a result of someone getting injured on your property.
- Relieves financial pressure: In the event of a disaster like fire or theft, a good house insurance coverage provides for replacing your belongings at current market value, thus cutting your losses.
- Covers temporary relocation: If your house suffers damage and you need to find temporary accommodation while repairs are going on, the policy would cover the rent you pay.
- Is cheap: While your house is an asset that costs lakhs or even crores, a home insurance can be bought for a few thousand rupees. So, you get a high degree of protection in return for paying a small sum.
With more and more homeowners going for houseowner's insurance, different types of home insurance plans are becoming available. The best insurance policies cover a broad range of risks. Here are a few popular home insurance policies available in India:
- Standard fire and special perils policy: As is evident from the name of the policy, the standard fire and special perils policy provides coverage against damage by fire and perils listed in the policy. The perils could include damage due to explosion, lightening, storm, cyclone, riots, impact by any vehicle and so on.
- Building policy: This type of home insurance policy covers any damage to the building structure, and other structures within the compound like garage or outdoor sheds. It also covers things like kitchen fittings and bathroom fixtures.
- Home content insurance: As the name suggests, this policy provides insurance coverage for household articles such as furniture, utensils, crockery, electrical equipment like oven and room heaters, and clothing and carpet. The content insurance policy also covers electronic equipment and jewellery.
- Public liability insurance: If a third party like a guest or a passerby suffers bodily harm while on the property or due to something on the property, the insurance policy will protect you against any legal and third party liability.
- Personal accident insurance: In the event of an accident or mishap leading to death or injury to a family member, having this policy ensures compensation is provided.
- Renter's insurance: Also called tenant's insurance, this policy compensates the tenant for any loss he may suffer due to fire, natural calamities, burglary and so on in the rented premises. Although widely available, not many Indians know about this renter's insurance.
- Landlord's insurance: When the landlord has properties that have been rented out to tenants, buying a landlord's insurance can cover for loss arising out of rental properties. Landlord's insurance compensates for damage to rental property, loss of income from rental property, and any liability arising from a rental property.
- Burglary insurance: When burglary or housebreaking happens, resulting in damage to the premises and theft of contents within the house, burglary insurance policy covers the loss the policyholder has suffered.
What is not covered by homeowner's insurance policy
While home insurance plans available in India cover a wide range of risks, there are a few exclusions as well. Here are a few things that can make your claim void or difficult to settle:
- Misrepresentation, wrong description or non-disclosure of any information while purchasing the insurance policy
- Staking an insurance claim for a pre-existing damage
- Loss of cash
- Damage caused by war/nuclear war and invasion
- Equipment with manufacturing defects
- Age of a kutcha construction exceeding 30 years
- Loss due to wear and tear, and depreciation
- Wilful damage to house and/or its contents
"• First thing you need before taking a home insurance is clarity, as in why you need home insurance. Is it for the building, the land or for the contents within the home? Generally, it’s not a good idea to take insurance on the land. So, if you buy a flat which comes with UDS (Undivided Share), you need to take insurance only for the construction costs.
• It is better to reach out to experts and decide what your needs are, and what the solution would be.
• It is possible that despite having a policy, your insurer might just deny your cover. So, it is important to go through the policy clauses to avoid this. Read the policy document carefully. There is a 15-day grace period within which we can surrender any policy – whether it is home,health or a life insurance.
• Insurers don’t want to cover the cost of the land. However, the construction on the land for risks, like an earthquake, can be insured."
— A V Senthil, Finance Expert
Home insurance policies are available for both landlords and tenants. So, understand your needs and then go about comparing the various homeowner's insurance plans available to buy the best home insurance policy.
Devishobha Chandramouli is the founder of Kidskintha — a resource hub for parents and educators.
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