Buying a home is a lifelong dream for most of us. It is also one of the most expensive purchases you will make. Given that it is expensive, it is highly important to protect your house against the potential threat. The best way to do this is by getting a comprehensive home insurance, which protects against any damage to the house and valuables in it.
What is home insurance?
Home insurance is an insurance policy that covers both damages to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people.
Types of Home Insurance
A basic home insurance policy
It covers fire damage, storm and floods.
A wider policy
To protect your home from earthquake, burglary, damage, and mechanical or electrical breakdown, you may have to take a comprehensive one and pay more. If you are in a flood or earthquake prone area, then make sure you take the complete package to cover the risk.
A home insurance covers damage caused by both man-made and natural disasters, so it is essential to buy an adequate cover. The premium is determined by the value of the property, its location, and the content within. It is a wise idea to cover everything within and get a comprehensive coverage.
The sum insured is calculated differently for structural insurance and contents insurance. For structural insurance, the sum insured takes into account the cost of rebuilding the property rather than the market value while for the contents of the house; the depreciated value of the items is used. If your home is 1,000 square feet and the construction rate is Rs 900 per square foot, then the sum insured for your home’s building structure would be Rs. 9, 00,000.
Benefits of Home Insurance
- Complete coverage against financial liabilities from damage or loss of your home
- Covers man-made accidents such as Burglary and Theft Cover, Earthquake Cover, etc.
- Cover to fall back on during environmental calamities
- Timely payments help you rebuild quickly, helping you get back on your feet quickly.
Tips for choosing the right insurance
Check the coverage and the premium
To begin with, evaluate all the risks in your home before selecting a policy. In case you have a lot of valuables at home, you should make sure your policy covers them all. It is also a wise idea to check if the premium fits within your budget. You can use policy comparison websites to get the best quote.
Check the claim settlement ratio
You should always check the past records and see if the insurance company is settle claims quickly. A good company always pays their claims quickly. So make sure you check the claim settlement history before you choose an insurance company.
Things to remember while filing a claim
- Produce evidence of damages to your home
- The insurance company will inspect your home before accepting the claim
- The level of damage may also exceed the sum insured.
While filing a claim makes certain important documents such as policy number, insurance papers, the extent of loss calculated along with date and time of the incident and claim form are in place.