Orchard 126 HIRA Registration No. - HIRA/P/NOR/2018/000236

Posted On January 15, 2020

Home Insurance Policy – What to Do and What Not

Home Insurance Policy- Do and Don't

When one talks about home insurance against natural calamities or manmade disasters, there are several different policies to choose from. Herein, we take a look at the differences between them to help homeowners choose the right kind. Read on to find out your best fit.

Natural disasters causing damage to properties is one of the most significant financial setbacks to encounter in one’s life. Take the recent instances like the flood of Kerala in 2018 that wreaked havoc incurring damages to the count of crores, thus leaving people homeless. Since humans are vulnerable in front of natural disasters, one can definitely protect to minimize the damage or the losses incurred. Now, insurance is typically the first cover for the majority of homeowners globally. However, only a handful of us thinks about it in our country. Even after home insurance have become affordable in India and readily available, only 1-2 percent of people are actually keen on buying it. One needs to understand the significance of purchasing a comprehensive insurance policy for their home, which in the future can safeguard themselves against heavy financial losses brought upon by disasters. Home insurance policies generally tap in to cover all sorts of human-made and natural disasters that include the following:

  • Earthquake
  • Flood
  • Theft or robbery
  • Terrorist attacks and more

Any comprehensive home insurance policy offers optimum cover for the whole structure as well as the contents within a home in the wake of unforeseen circumstances, which also includes natural disasters. Hence, it is highly recommended for one and all home buyers so as to ensure that people aren’t left clueless in the face of financial crunch to put things back in place.

Major Home Insurance and Cover Types

Home Insurance Coverage
  • Coverage for structure: Under this kind of home insurance coverage, homebuyers are offered protection for the very structure of their homes that includes permanent fixtures as well as all built-in items.
  • Coverage for contents: Under this kind of coverage, homebuyers are offered protection for the contents within their living space that includes electrical, jewellery, furniture as well as for portable appliances.

Besides offering essential protection for your home when affected, a home insurance policy also comes with a lot of add on covers like the cost of living within a rented accommodation when your affected house if being worked on or repaired. If the affected house itself was rented out, the owner, in some cases, might ask for additional coverage for the loss of rent incurred if the natural or human-made disaster-affected it during the rental occupancy. However, such coverage add-ons are only limited to the fulfilment of specific conditions and a certain time period within which you will have to secure it.

Landlord insurance:  A type of insurance coverage that guarantees protection against financial risks to a property caused by natural disasters like fire, flood, earthquake, as well as any damage due to the action of a tenant and more. In the event of the landlord witnessing financial loss owing to the damage caused to the insured property, the insurer is liable to pay for the replacement. However, the damage reimbursement is made towards adjusting the applicable deductibles keeping in line with the pre-decided terms and conditions. For instance, if a house gets affected by the fire, and the kitchen takes on the damage, the insurance provider shall pay for the repair costs for the kitchen area only. However, before one receives the claim amount, they might ask you to pay the deductibles.

Coverage for Properties under Construction

Property Coverage

A home insurance policy is generally applicable for all finished and habitable properties. So, what if when you have already invested in an under-construction property? Shouldn’t there be any coverage for the same? Well, in such cases, reputed builders in Kolkata solely have to procure an insurance policy for the project. Take 2BHKs flats in North Kolkata, for instance, which are always in high demand and in areas like North & South Kolkata, where high rise residential projects have come up. Doing so will help him gain coverage from one and all kinds of threats for an under-construction property in the wake of a natural or manmade disaster. So, before one invests in an under-construction project and applies for a home loan, check with the builder if he has already procured insurance policy coverage.

Which is the Right Home Insurance Policy for Me?

Home Insurance Policy

It’s only natural for a landlord to be concerned about the very structure of a property. Hence, a landlord will always be keen to buy a home insurance policy the offers maximum coverage for the structure of his house. In comparison, a tenant will naturally be more concerned about his belongings and care less about the space. Hence, coverage for the contents of the house is applicable and more desirable to him. Any comprehensive home insurance policy offers the benefit of risk coverage for house contents as well as the structure. Nevertheless, it is always advised to the buyers that they read the offer documents carefully before agreeing to sign and form a strong understanding of all that is included and what all is excluded. This should help the applicant figure out the inherent risks and hazards the plan is designed to cover.

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