Home Insurance Plans
What is a Home Insurance Plan?
Your home is a costly investment in life. A Home Insurance policy ensures that your life’s biggest investment is protected well against all sorts of possible calamities and damage. Home insurance plans offer to cover damages to the structure of the house from either inside or out, or even both. They also offer coverage for damage to the contents of your home. For people who have settled in disaster prone areas, disaster plans can insure you against possible calamitous damage to your home and its precious contents. Home insurance policies strive to protect us against both natural and man-made calamities that can cause harm or damage to our home and its contents.
What are the benefits of buying a Home Insurance Plan?
One of the key benefits of investing in a Home Insurance Policy is the peace of mind that your home and possessions are financially covered in the case of any damage or loss. These days, home insurance policies are comprehensive, covering not only the standard damage and accidental insurance, but also providing specialized cover against burglary, theft, and specific natural disasters as named under the policy. Additionally, home insurance policies can cover valuable assets within the house as well. Home insurance policies typically carry lower premium rates than other policies, making these an attractive way to secure your home.
What are the different types of Home Insurance Plans?
There are several categories of Home Insurance Plans.
1. Building Insurance:
These insurance policies are usually mandated by housing finance companies to protect their investments against loss or damage. They insure your building against its reconstruction value. This covers against all calamities and risks, and includes certain fixtures within the house and certain external structures as well.
2. Fire and Perils Policy:
This protects against standard perils such as fire damage, man-made accidental damages and other standard perils. Some perils such as acts of terrorism, natural calamities like floods and cyclones may need to be explicitly named in the policy and will not be covered as default.
3. Contents Insurance:
This policy protects the possessions and interiors of your home against theft, loss, fire damage, flood damage and other such damages. This claims against this insurance are really helpful while reconstructing your home because it gives upto 70% of the value of your assets back to you under the claim.
4. Tenant’s Insurance:
If you’re simply renting a flat or an apartment, you need not get any building insurance. But a tenant’s insurance policy does ensure the security of your possessions in the case of theft, burglary and natural disasters.
5. Homeowner’s Insurance:
This is also known as landlord’s insurance. If you own a property, then its maintenance and upkeep is solely your responsibility. A standard building policy does not cover exigencies such as loss of rent and public liability. These things are explicitly covered under a landlord’s insurance policy and protects your home against defaulting renters.
How to choose a Home Insurance Plan?
There are two main factors to consider while buying a home insurance policy.
This is the first thing to determine when choosing a Home Insurance Plan. How much and what types of coverage does your policy offer. You should weigh these options against factors such as the location of your home and its proximity to natural disasters such as floods, cyclones, fire etc. Based on the coverage offered, the premium values will vary quite a bit as well. Weighing premiums against coverage is a key way to decide to go for a specific home insurance policy. The investment you make must ultimately be worth the returns in case the policy has to be encashed.
2. Claims Settlement Ratio:
You should carefully look at the settlement ratio for each insurer to get a better idea of the chances of getting an insurance claim settled in case an unfortunate event occurs. Further, look into the time it took for the insurer to settle the claims presented. In many cases, a claim reimbursed too late is no help at all. You can also look at the overall market reputation of the insurer through blogs, forums, comparison websites and user reviews. These inputs will help you decide whether an insurer is right for you.
How much cover should I buy?
There are several consideration factors that go into deciding how much home insurance cover you need to buy.
1. Rebuilding Costs:
While deciding the amount of cover you need, the first thing to calculate is the cost that you would incur if the house had to be rebuilt. This will be factored based on the built up area, materials used, labour and costs (adjusted for inflation), special features or alterations made to your home. This cost could also be equated to the selling price of the house.
2. Value of possessions:
Insurance policies will cover only a certain percentage in the case of loss of assets. Therefore, make a detailed list of your possessions and assets that you keep in your home and estimate the cost of replacing them.
3. Alternate accommodation costs:
This is one cost many people neglect to calculate. While claims are being processed against your policy, you and your family will need temporary alternate accommodation. You should calculate the costs for such accommodation, including household expenses for a reasonable period of time.
4. Liability to others:
In case of damage to your property which causes harm to others in any way, your policy may need to cover you against litigation expenses for the same. Take these into consideration while calculating the policy cover you need.
How can Home Insurance Plans help protect my Family?
Home Insurance can provide the best peace of mind in the case of a difficult situation such as burglary, fire, accidents or natural disasters. The biggest worry in these situations is the financial stability of you and your loved ones. Home insurance policies are specifically tailored to provide such stability to you. Claims can be made against loss of property and possessions, cost of alternate accommodation and other litigious claims you may have to face. All of these take a physical and mental toll, and the knowledge of financial security in trying times will ease the burden.
For a genuine and transparent advice on your Home Insurance Plans, call our advisers on 9948 661 204 and get a Free Consultation for the first time. Alternatively, submit our enquiry form and one of our Financial Advisers will get back to you at your convenience.
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