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Home Insurance - Much more than a cover for your house structure

Posted by - Sanjay Datta, Chief - Underwriting, Reinsurance & Claims
May 19 2014
First the Uttarakhand catastrophe and then Cyclone Phailin - one after the other natural catastrophes have been hitting the Indian sub-continent with full velocity destroying thousands of homes, leaving behind people in distressed conditions. Such natural calamities are a reminder for us to take proactive steps towards protecting our most priced asset our Home.

It is a dilemma that we spent lacs of rupees towards buying our dream home but shy away from spending a few thousands more to protect it with a home insurance policy. Most of the time though this behaviour is influenced by lack of awareness and understanding of the product benefits.

A comprehensive home insurance policy offers a host of covers for your home including its contents, thus saving you from the burden of reinstating or repairing your home from your own pocket.

  • Structure/ Buildings insurance covers the structure and its inbuilt fittings against loss or damage caused by fire, flood and other perils. It also covers damages caused by other calamities such as landslides and subsidence. One condition that companies apply in home insurance is good state of repair which means that the property will not be insured unless it is well maintained and can be repaired if damaged. For this condition Kutcha houses are not covered even if in good condition.
  • Additional Expenses of rent for alternative accommodation cover is offered by several insurance companies. If your house is damaged by flood, fire, riot or other extraneous perils and requires repair, the home insurance cover will pay the rent of an alternative accommodation where you and your family can stay temporarily until the restoration is completed.
  • Content insurance cover for fire and special perils is designed to protect your belongings against damages caused due to specified natural calamities as well as burglary. Even if you have rented the house, this component of home insurance will continue to cover your contents during the period of rent. In case of burglary, the cover also provides compensation against damaged furniture and stolen belongings. However, for insuring antiques and valuables like basic jewelry above one lac, you need to take an additional cover.

    Apart from the above covers, there are other covers that form part of your home insurance policy.
  • All risk specified articles cover is another variant under home insurance which covers damage against accidents. This type of cover protects property and belongings against damage caused by an accident irrespective of the severity. Although standard home insurance policies usually provide some cover for accidental damage from the already specified perils, they may not cover everyday mishaps. This cover may not be significant in natural calamities but it is definitely important for minor damages. For example, this cover will protect your possession like Television or any other content if hit by say, a cricket ball
  • Public liability insurance cover caters to expenses which you are legally liable to pay in the event of damage or injury to a third party caused by you or your family. As is evident, a Home insurance policy covers more than the structure of your house. When we have incurred so much expense to purchase a house, it makes sense to spend a little more to cover it against perils.
Equipped with information on these intricacies of health insurance, you can choose a policy that will work at the time of claim settlement. Today, most insurance companies provide detailed information on health insurance policies including their features, exclusions, terms and conditions etc. You can also specifically ask for this information in case you are purchasing the policy offline through the company or agent.

So don't choose your health insurance policy merely on benefits, but look at the exclusions and policy terms as well. These may turn out to be more important during claim settlement than the policy features.

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