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Safeguard yourself from financial setbacks by knowing more about Home Insurance.
It is said that home is where the heart is. People are heart-broken when they see their homes and precious belongings being reduced to dust. Home insurance cannot prevent this destruction. However, it can financially compensate you if your homes or belongings are destroyed. Availing home insurance is a smart thing to do.
Myth 1: Home insurance is expensive.
Reality: This is perhaps the biggest misconception about home insurance. Insuring your house is not as expensive as you think. For instance, for a sum insured (structure) of Rs. 21.6 lakh (a 1200 sq.ft. built up house x construction cost of Rs. 1800 per sq.ft.); the premium for 5 years is Rs. 4860. Further, the 5-year premium for the content worth Rs. 5 lakh (including jewelry) would be another Rs. 5814. Add to that 5 years of Terrorism Cover Premium for a premium of Rs. 266 and 5 years of Rent for Alternate Accommodation Premium of Rs. 188 and the total Premium will come to Rs. 11,128 for 5 years, i.e. just Rs. 2225 a year!
Myth 2: You should buy lower coverage in order to reduce home insurance premium. This helps in saving costs.
Reality: A lower coverage will reduce home insurance premium. However, it beats the very purpose of availing insurance. A low coverage will not cover your entire risk. Hence, it is necessary to avail sufficient coverage to avoid financial s tbacks. As discussed above, the change in premium will be marginal.
Myth 3: Home insurance is only for homeowners and not for tenants.
Reality: Home insurance covers two things - structure and contents. Homeowners can insure both, the structure as well as the possessions while tenants can buy content insurance to cover the possessions such as home appliances, clothes, and locked jewelry.
Myth 4: Home insurance is only available for natural calamities like earthquakes, floods, etc. It cannot be claimed in case of burglary.
Reality: Home insurance will compensate you if possessions are lost or damaged due to burglary. It also covers losses caused due to attempted burglary. However, it generally does not cover cases where your domestic help is involved in the burglary. One should ideally opt for a comprehensive background verification check before hiring a house help.
Myth 5: Furniture damaged at home is not covered under home insurance.
Reality: Furniture and appliances are also covered under home insurance. However, furniture damage due to termites cannot be claimed. Similarly, breakdown of appliances due to mechanical or electrical reasons is not covered.
Myth 6: Home insurance only covers natural calamities that take place regularly like earthquakes, floods, etc. It does not cover calamities that occur rarely.
Reality: Besides covering calamities like storm, cyclone, typhoon, floods, home insurance also covers other calamities. It provides compensation for damage caused due to landslides, lightning, bush fire, etc. Even if a missile hits your home due to some missile testing operations, home insurance covers it. In fact, some insurance policies also offer an optional cover for terrorism and additional expenses of rent for alternative accommodation.
Myth 7: Home insurance does not cover damages due to normal wear and tear like leakages.
Reality: Some leakages tend to damage home structure and possessions. If your home is damaged because of leakage from overflowing water tanks, pipes and automatic sprinkler operations, it is still covered!
It is said that home is where the heart is. People are heart-broken when they see their homes and precious belongings being reduced to dust. Home insurance cannot prevent this destruction. However, it can financially compensate you if your homes or belongings are destroyed. Availing home insurance is a smart thing to do.
