What is Home Insurance?

House provides shelter for living, and it is built upon the emotions and the efforts of the people residing in the house. Coming back to your house gives you a mental peace and warmth after a day's hard work. However, your home might be threatened with damages caused by natural and man-made calamities. Home is an asset, and you must secure it from any threat or damages. Home Insurance is a type of property insurance aimed to protect a home and its contents against damages. A Home Insurance policy provides financial protection in case of any damage happens to your home. A disaster may ruin your house, just buy a Home Insurance and get a cover for your home against losses/damages.

Who can buy Home Insurance Policy?

• Owner of an Independent building/ flat/ apartment can buy a home insurance policy for his/her building and its contents.

• Any tenant can also ensure the ‘contents’ in the Independent building/ flat/ apartment occupied by them for residential purpose.

What kinds of Home Insurance Plans can I opt from?

Following are the three most common types of Home Insurance Plans, you can choose from. The perils covered under the plans may vary from insurer to insurer.

1. Building Insurance

This type of home insurance policy provides insurance cover to any the home structure or building against damage because of the man made purposes or natural calamities to the amount of providing claim for the full value of reconstruction in case of complete destruction or as per the defined terms and conditions in the policy.

2. Content Insurance

This type of home insurance policy covers the contents of the house as they also hold a high value and any loss of such contents may result in a high financial loss. Content insurance pays for damage or loss of personal possessions located within the home. With contents insurance, the goods inside your house are covered against loss and damage caused by fire, flood, theft, or other perils mentioned in the policy. Contents may include important documents, jewelry, refrigerator, TV, piece of art, etc. are covered under this home insurance policy.

3. Building + Content Insurance

This is a comprehensive kind of home insurance policy which will provide protection against any damage which happens to the structure of home and also the valuable contents of your house.This kind of insurance cover provides a total protection to your home and will be a foolproof arrangement by providing financial assistance in terms of claim for any loss or damage due to the covered perils in your home insurance policy.

What are the Benefits of Buying a Home Insurance ?

Benefits under the home insurance policy is based on what you want your home insurance policy to cover for you. The home insurance policy with many insurers can be custom fit to the needs.The basic coverage which is provided under the home insurance is as follows

Fire and Allied Perils Cover

The home insurance policy covers man made and natural calamities under standard fire and special perils policy. Following are the perils covered under the standard fire and special perils policy

• Fire

• Storm, Cyclone, Tornado, Flood and Inundation

• Riot, Strike, Malicious Damage

• Lightning

• Impact Damage

• Aircraft damage

• Bursting and/or overflowing of water tanks, apparatus and pipes

• Explosion / implosion

• Subsidence and Landslide

• Missile testing operations

• Leakage from automatic sprinkler installations

• Bush Fire

 

Package Cover

Such policies are basically customized home insurance policies which offer basic protection against fire and allied perils to the structure and the contents of the house as opted and also offers protection against theft and burglary, third party liability, earthquake, terrorism,etc. as opted by the policyholder.

What is the Basis of Sum Assured?

For Building/Structure Cover, the Sum Assured of the insured property is calculated based on either of the methodologies.

Agreed Value

Under this methodology, the sum assured (SA) of the BUILDING is computed as per the total value of the property which is calculated as

Agreed Value based SA = Total area of the insured property x Price per square feet

You may enhance the sum assured in case you have added value to the property by adding latest a new feature to your home.

Reinstatement Value

Under this, the sum assured is calculated is based on cost of reconstruction.

Reinstatement Value based SA = Total area of the insured property x Per square feet cost of construction as on the date of seeking insurance

Indemnity Value

Under this evaluation methodology, depreciation plays an important role, as it is deducted from the total value of the insured property.

Indemnity Value based SA = Total value of the property as on date – Depreciation Amount

For CONTENT COVER, the Sum Assured of the insured contents is calculated based on either of the methodologies

Replacement Value

Sum assured of the contents is based on the value of replacement of the same contents of the same property with new one without accounting for depreciation.

Indemnity Value

Under this methodology, the sum assured is calculated the cost of attaining the new content less depreciation allowance.