What is Home Insurance? – Everything you need to know

What is Home Insurance? – Emphasizing the importance of immovable assets such as land and property, the coronavirus pandemic has exposed the vulnerabilities associated with movable assets. Though your homes are safe to deal with any adverse situation, they still need a cover that protects you in case something bad happens to the property. Here comes the importance of home insurance.

What is Home Insurance?

There are different types of insurance policies currently available in the market that promise to protect you from adverse situations. An insurance cover, which promises to protect your home and property against adverse conditions, is known as home insurance. Apart from landlords, tenants can also buy a home insurance policy to protect the house and its premises from any mishaps. Here, it is important to mention that home insurance and home loan insurance are two different insurance products, they serve different purposes, and one should not be confused with the other. To understand better these two products and their differences,

What is Home Insurance?
What is Home Insurance?

Cover loss insurance under home

Home insurance policies in India provide home protection from various unpleasant situations including nature-induced calamities like cyclones, storms, lightning, earthquake, flood, landslide, tsunamis, avalanches, fire, terrorist attack, and burglaries, man-made disasters. Riots, etc. The property insurance policy will offer a cover against these calamities by way of reimbursement and will help in rebuilding your property. Also, there are different types of home insurance policies, and they usually offer specific cover. If you want protection against a bunch of calamities, you need to buy a customized property insurance policy. To understand this better, we have to find out the popular home insurance policies in India, which we will discuss in the next section of this article.

Losses not covered under home insurance

There are many types of damages to your property, which your home insurance policy does not cover. You have to be extremely careful with these pitfalls. Firstly, a home insurance policy only covers the construction cost of your home. This means that it will not reimburse you the full value of your property including the cost of the land. Property insurance cover will also not reimburse you for organic depreciation in the value of the property. Though home insurance policies offer relief in case of calamities due to fire, they will reject your claim in case of fire due to the over-running of electronic equipment. Insurance companies do not offer cover even in case of damage to your property due to the ongoing war between two countries. Some of the damages to your property that are not covered by home insurance policies are listed below:

  • Natural wear and tear
  • Damage to undeclared goods
  • Harm caused by pets
  • Disadvantages of running a business from
  • Business activities
  • War, nuclear attacks, invasions, damage caused by acts of foreign enemies
  • Damage due to improper use of electrical equipment
  • Loss of cash, antiques, and collectibles during theft and robbery
  • Damage to an under-construction property
  • Damage to a property that remains vacant willful destruction of property

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Types of Home Insurance Policies

400;”>At present there are about eight types of package policies for landlords and shopkeepers in the market. Some of them are mentioned below.

  • Standard Fire and Special Risk Policy
  • Home structure insurance
  • Public liability coverage
  • Personal accident
  • Theft and burglary insurance
  • Material insurance
  • Renters insurance
  • Homeowner’s insurance

Home insurance policy premium

With the tremendous increase in the incidence of natural calamities, the cost of buying home insurance is increasing. The premium for your home insurance policy will vary depending on the insurance cover you have applied for. Generally, insurance companies reimburse the estimated amount under the policy contract, the total amount that the company comes up with after factoring in the value of the asset-based on key determinants. These include the exact location of the area, the area over which the property is spread, and the quality of materials used in construction and facilities.

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Key Points to Remember While Buying Home Insurance

*Search for protection keeping in mind the topographical challenges of the location. A property close to the ocean always needs cover against cyclones and tsunamis. Similarly, a property located in an earthquake zone would require a cover against it. *Read the policy documents thoroughly. Insurance companies will use any of these clauses to either cripple you in times of need or to deprive you of benefits, no matter how sweet their branding pitch. You should have complete knowledge about the product. *If there is any disaster in your home, then without wasting time inform the home insurance company. *Declare a list of all the items in your household at the time of purchasing the policy. Items you forget to mention in the home insurance policy will not be reimbursed for the value. *Insure only expensive items and those whose replacement may be a problem for you. Do not extend home insurance coverage unnecessarily as it will amount to higher premium payments.

F.A.Qs – Home Insurance

Is our home insurance and home loan insurance the same thing?

No, home insurance and home loan insurance are completely two different products.

Which are the leading companies providing home insurance in India?

Some of the leading companies that provide home insurance in India include Bharti AXA Home Insurance, ICICI Lombard Home Insurance, IFFCO Tokio Home Insurance, HDFC ERGO Home Insurance, and Reliance Home Insurance.

Can I claim a tax deduction on my home insurance premium?

No, you cannot claim tax deduction on the premium paid on home insurance.

Now you all know well about all the information related to Home Insurance What Is Home Insurance. If you want any more information about home insurance, then do comment below, we will be very happy to help you.

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