Almost all of us are now aware of the need for life or health insurance. We also understand that vehicles need protection and that there are now options to avail travel insurance to protect us from issues like a train or flight cancellation or even luggage theft. But, home insurance is not something that many of us think about unless it is part and parcel of the home loan availed by us. Most often, once the loan tenure is done, we do not renew the home insurance as we don’t see the need for it.
- So, what is home insurance, and is there a real need for it in India?
- Who should take out home insurance?
- How will it help or not having one cause an issue?
- If we need to avail it, what factors should be considered while taking it out?
These are the queries which we will try to address in this article today.
What is home insurance?
Home insurance is usually taken by a house owner, on the home and the items within it. This is typically taken to protect against any loss happening due to unforeseen events like floods, earthquake, riots, theft, fire, etc. You may recollect the hilarious movie ‘Oh My God’ of Paresh Rawal, wherein he lost his shop due to an earthquake, and then when he tries to claim the insurance, he is told nonchalantly by the insurance provider that it is an act of God, which is not covered!
Jokes apart, if you also recollect how people have recently lost almost everything in the recent floods and cyclone in the country, you may realize the importance of home insurance. The premium that you pay out every year, maybe a small price to pay for the peace of mind of knowing that you are safe to a certain extent against any such untoward incidents.
Incidentally, though most often called as home owner’s insurance, even people staying on rent can take out a home insurance policy on their belongings in a house. In short, home insurance can be availed by anyone who would like to protect their belongings also and not just the home by itself.
About coverage and need
Some of the inclusions that can be considered while taking out a home insurance policy are:
- Aircraft damage
- Riot or strike
- Missile testing operation
- Burglary or theft
If you ask the people on whose homes an IAF plane crashed recently near the Yelahanka Air Force Base, it is not funny at all, to have aircraft damage covered in a home insurance policy. Typically, what it does is to cover any damage to the structure of the home as well as its contents, from any form of natural or human-made calamities as mentioned above. The movie OMG though was a parody on the insurance as well and hence; one must need to make sure to read the fine print and the Terms and Conditions and the coverage aspects fully well, before signing on the dotted line.
Note: Every home insurance policy will also have specific exclusions, and you need to ask and know what these are so that you are not under any false impression.
Tips for choosing a home insurance policy
Multiple insurance providers in India are providing home insurance policies now, and hence, you can afford to compare and select the best possible one as per your needs. Some regions are marked as earthquake-prone or flood-prone, and in such cases, you may need to make sure to ask all questions and doubts about the coverage. Once done, check and compare premiums across a few providers before taking out the policy. The cheapest may not always be the best, and you need to ensure your needs are covered.
Check the company’s settlement ratio, its reviews, and talk to a few people around to make sure that you choose the right provider. There are many sites like policybazaar.com that can provide you a lot of information on comparison in one place. Also, consider the reputation and the standing of the company in the market as well as the ease and availability of staff and information for any processing.
You can reduce the insurance premium by choosing to share a % of the repair burden, by not insuring very old and invaluable items in the house, and also showing some safety covers like a burglar alarm, or a security guard or any such safety equipment. In today’s scenario, it is better to take out a home insurance policy, just so that you may not feel totally lost for losing a lifetime of investment of your home and its contents.