For years, owning a house has been a major milestone for most people.
A very wise man once said – true happiness lies in buying your own house. This is because we are meant to think in a certain way when it comes to real estate. And buying a house, needless to say, is a big deal!
Purchasing a house is more like building generational wealth. At the same time, it offers stability, neighborhood and community. In fact, it won’t be wrong to say that buying a house becomes the be-all and end-all of human existence.
But while most people work towards making their dream come true, they neglect securing their property. This is exactly where home insurance comes into view.
Just like you buy health insurance for your physical well-being and life insurance for the safety of your loved ones, a home insurance policy is important for the protection of your abode from external perils.
Wondering who came up with this awesome idea of protecting a house? The first home insurance policy was introduced in 1950 in the United States. But similar kinds of policies existed in Great Britain already.
In the late 1940s, the US insurance law was reformed and made home insurance policies legal. Before this, there were separate policies for different types of perils that can affect a home. But during the 1950s, policies formed, allowing the homeowner to purchase a complete policy.
We are sure this heightened your interest in home insurance. So, without further ado, let’s begin.
- The first home insurance policy was introduced in the 1950s.
- Before the 1950s, there were separate policies for various types of perils.
- A home insurance policy covers the losses and damage to your residence.
- Best home insurance in India also provides public liability cover for injury/damage due to the house.
- Both the landlord and tenants can take a home insurance policy.
What is Home Insurance – A Simple Tool to Protect Your Sweet Home
Home insurance, also known as homeowner’s insurance, is a type of property insurance that covers the damage and losses to a person’s residence, along with assets and furnishings in the house.
It also provides liability coverage against any accidents on the property or home.
So basically, home insurance covers four types of incidents – interior damage, exterior damage, an injury that occurred while you were on the property, and loss or damage of personal belongings.
Acts of God, including earthquakes and floods and acts of war, are usually excluded from standard home insurance policies. So, if you reside in a location prone to floods or earthquakes, it is best to get special coverage.
Why Do You Need Home Insurance?
Buying your own cosy space is one of the largest expenses you’ll make in your lifetime. It would be sensible to protect it from internal and external factors.
Here’s why you need home insurance.
Protects More than Your Home
Home insurance not only protects your home from physical damage but also provides coverage for the stuff inside the house.
A comprehensive policy also covers thefts and burglary. But make sure to get adequate coverage that covers all these items.
Provides Compensation for the Losses
A home insurance policy also provides compensation for your losses. This is important in case of damage caused by uncertain factors like earthquakes, cyclones, storms, floods, etc. Plus, home insurance compensates for the losses that occurred to the items inside the house.
Home Insurance is Affordable
A home insurance policy helps you recover from the damage caused to your house without creating a hole in your pocket.
A typical policy providing coverage of up to 40 lakhs will cost between 2k-5k. A small investment towards your house can save you from heavy expenses later.
What Does Home Insurance Cover?
Although a home insurance policy can be tailored in infinite ways as per your requirements, it has some standard elements that the insurer will cover.
Damage to Interior and Exterior
In case of damage to your house due to lightning, vandalism, fire or other covered disasters, the insurance company will compensate for repairing and rebuilding the house,
Destruction from earthquakes, floods and poor home maintenance is usually not covered in the home insurance policy. For that, you will require separate riders.
Besides, a home insurance policy will also cover appliances, clothing and furniture in case of an insured disaster.
You can also get ‘off premises’ coverage, so you can file a claim for, say, lost jewellery, no matter where you lost it. But there will be a limit on the amount compensated by the insurance company.
Did You Know?
About one in twenty houses has a claim every year.
The liability coverage in a home insurance policy protects you from the lawsuits filed by others. It even includes your pets.
So, for instance, if your dog gets furious one day and bites your dear neighbour, Ramlal, the insurer will pay for the medical expenses. Similarly, if your child breaks Ramlal’s expensive vase, which he keeps mentioning in his conversations, you can file a claim for reimbursement.
But what if Mr. Ramlal slips on that vase and gets injured? You’ll be covered for that, too, with home insurance.
Hotel or House Rental
No, home insurance does not pay for any house or hotel you live in. By house or hotel rental, we mean the cost incurred while you wait for your home to be habitable again.
This coverage is known as additional living expenses.
Safeguard Your Home: How Does a Home Insurance Policy Work?
Taking a home insurance policy can be broken down into easy steps.
Step 1 – Obtain Quote
While taking home insurance isn’t difficult, there are a few important things to keep in mind.
First, you must research different insurance companies and the home insurance plans they offer. You should also consider the discounts and the coverage provided.
Step 2 – Purchase a Policy
Yaay! Now that you’ve found the best home insurance in India, you can go ahead and purchase a policy.
You may be required to sign an application and make a payment.
Step 3 – Maintain the Policy
Once you’ve purchased the policy, maintaining it is simple. You just need to pay the premiums on time.
Step 4 – File a Claim
While this shouldn’t happen but in case your house gets any damage, you must file a claim.
And how do you that? It’s no rocket science!
You can file a claim online through an app or over a call with the agent.
Who is it For?
Unlike motor insurance, which is only meant for people with vehicles, a home insurance policy can be purchased by anyone owning a house, be it a landlord or a tenant.
It is a false impression that only homeowners can buy home insurance policies, but that’s not the case. Home insurance in India is beneficial for the tenant and the owner. While the homeowner can take cover for the house’s structure, a tenant can take coverage for personal belongings.
Word to Remember
Deductible in insurance refers to the amount that the insured person pays before the insurance provider pays the remaining amount. Most people know about deductibles in health insurance but they are applicable in home insurance as well.
Have a Fancy Home – Make Sure to Protect It
While taking home insurance may seem like an unnecessary cost, believe us when we say it would be highly beneficial in case of unforeseen events.
Protect your property from internal and external factors with a home insurance policy. Get yours today from a reliable insurance provider.
Your mortgage lender will ask you to buy a home insurance policy while closing in on your home.
You may or may not need a home insurance policy, but the mortgage lender will typically require coverage to provide a home loan. Even if you didn’t take any loan to buy your house, it is still a good idea to protect your property with a home insurance policy.
In case you need to repair or rebuild your house after a loss, you can get financial compensation for the same with a house insurance policy.
There are a few factors that affect the cost of home insurance in India. It includes –
The area you live in
Price of the house and cost to rebuild it
Age and condition of the house
Safety features in the house
Older homes carry a higher risk compared to newer homes. Their construction material can be obsolete, they are likely to be certain fragile components like plumbing, or the roof may not be in good shape. For this reason, the home insurance premium is higher for older homes.
In case of any damage to the property, the policyholder should inform the home insurance company at the earliest. Then, the insurer will have an agent survey your property for the losses incurred. So, it is important for the policyholder to present satisfactory proof to verify the claim.
Insurance companies usually settle home insurance claims within a period of seven to fourteen days.