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Home insurance policy: A protective wall for your home

As the saying goes, ‘prevention is better than cure’, so is to get your home insured before witnessing any untoward incident. Home insurance play a pivotal role in making up your financial losses in case any disaster strikes. To protect ones’ property, home insurance is one of the greatest investments that a person can make.

What is home insurance?

Home insurance or homeowners insurance reimburses a person for the losses in his home and for his possessions inside the home. Home insurance policy is important if your home location is prone to floods, earthquakes or rainfall. Home insurance serves as a property insurance that provides protection to private homes against losses. Home insurance policy covers many things, which includes damage to the house, damage to the property and personal injury.

How can an apartment owner get his apartment insured?

There are insurance policies for every apartment owner and few of them are National Insurance, New India Insurance, United India and Oriental. Choosing the right company to get your home insured is very important as most people do not prefer private firms to get their apartments insured. Also there are various Indian home insurance firms which have their branches in overseas for apartment owners. However, if you look at a standard home insurance brochure, it states all the policies which will protect the structure of your apartment and its contents from untoward incidents like fire, theft, and earthquake and so on.

In case if there are any damages to the structure of the building, the insurer will pay on the basis of the house’s construction costs provided the damages are mentioned in the document. Also the reinstatement value is calculated on the basis of the built-up area and the construction cost which is fixed by the company.  If the apartment is on the owner’s land, the owner will just have to estimate the cost of the rebuilding, i.e. the sum insured. This will be paid by the insurance company for any damages by any disaster.

Insuring the structure:

Every policy is divided into two structures; cover for the building structure and cover for the building contents. If a person is getting an insurance cover of Rs 26 lakh, he should keep in mind that the insurance policies cover the structure for its reconstruction cost and not for its market value.  A person getting an insurance policy for his apartment should keep in mind that the insurance policy covers the home for its reconstruction cost and not for its market value. The reinstatement value is calculated on the basis of the built-up area and the construction rate decided by the insurer. The main aim is to get a cover which can be sufficient to rebuild a house for the damage caused in a disaster.

The other important factor responsible for indicating the reinstatement value is the location of the property. Although the premium rates are standard and the actual sum assured might differ from each location due to the difference in the cost of construction. However, people who do not own the property need not protect the structure but should follow the contents cover. People living in an area with seismic flood should pay a higher premium while insuring their property.

Home insurance companies and schemes:

The General Insurance Corporation of India through its ancillaries like United India Insurance, Oriental Insurance, the National Insurance Company, New India Assurance and others guarantee protection to the home owner. Other private insurance companies are Royal Sundaram Alliance, ICICI Lombard, Tata-AIG, Bajaj Allianz General Insurance Company and others.

Most home insurance policies cover the damage for:

#  Fire

#  Explosion/Implosion

#  Aircraft Damage

#  Impact Damage

#  Lightening

#  Subsidence and landslide including rockslide

#  Missile Testing Operations

#  Bush Fire

#  Bursting and/or overflowing of water tanks, apparatus and pipes

#  Man-made Calamities

#  Leakage from Automatic Sprinkler Installation

#  Burglary & Theft

Home insurance policies do not cover:

#  Loss of painting, works of art and antiques

#  Loss of cash, cards, stock or other documents

#  Loss or damage occurring when the home remains unoccupied, for a long period (usually 30 days)

#  Loss or damage to any illegally acquired property

# If the section of the house is used for commercial purposes

# Loss to illegally acquired property

# Loss on account of livestock, motor vehicles, pedal cycles, money, securities for money, stamp, bullion, deeds, bonds, bills of exchange, promissory notes, stock or share certificates, business books, manuscripts and documents of any kinds

Things to consider while insuring a home:

#  A person insuring his/her home should be truthful to state the correct value and the insured object to the insurance company.

#  To insure your appliances, you should clearly mention all the elaborate details like the name, the manufacturer, the value, purchase year, specifications and others for an easy settlement of claims.

# For appliances, one should ensure that the sum insured covers the replacement value of the appliance.

# It is important that you inform the insurance company of you have replaced any insured item so as the policy is revised.

# Also one should inform the insurance company of any change in address to avoid being ignored while claiming.

# One should also inform the insurance company if they’re leaving the home for more than four years.

# If one sells the property during the insured period, the insurance policy can be cancelled and one can claim the premium back on pro-rata basis.

The Householders’ policy

Householders’ insurance policy helps people to a large extent in case of a theft, fire or any damage to their household goods. This policy not only protect your house from unpredictable events, but also it covers house owner’s personal properties like jewellery, laptops, audio and video equipment, furniture etc.

Householders’ insurance policy covers the following sections:

#  Fire, building & contents: Fire lighting, domestic gas explosion, riot strike, storm, flood, earthquakes, landslides, bursting of tanks, pipes, etc.

# Burglary

# Jewellery and valuables: Accident or misfortune

# Breakdown of domestic appliances: Mechanical or electrical breakdown

# TV, computers and laptops: Mechanical or electrical breakdown/due to fire/burglary

# Baggage: Accident or misfortune while on holiday/tour anywhere in India

# Personal accident: Death/temporary disability

Tags : home insurance policies house holders' policy house insurance house insurance policy house owners insurance household goods Property Property insurance propertyy insurance what is home insurance

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