So you had the dose of bad news with your morning coffee?The pleasure of reading a newspaper in the morning, is waning with each passing day.You do not know what to expect after all that news of recession, cost cutting, salary slashing, layoffs, pink slips, slowdown and inflation, thus, overall global turmoil.

Indeed, the pleasure has turned into pain…

It is high time that you hedge yourself against all perceivable risks like health, critical illness and your family members’ and your lives, besides your invaluable assets like home. What if something goes wrong with ‘Home Sweet Home’, where you have invested not only your major financial wealth, but also emotional wealth? It is the culmination of your dreams. You have to safeguard it against any eventuality, as goes the saying, ‘Misfortunes do not come alone’.

You will admit that ‘Home Sweet Home’ is one of the largest financial investments you have made. That’s why it is so important to protect it. Home insurance, or householder insurance as it is also known, is one of the most important insurance policies you should go in for. Be it a hut or a bungalow, rented or owned, it is advisable to insure your house and belongings to guard the same against unforeseen risks.

Avoiding mental agony

The household goods and personal belongings represent many years of financial and emotional investment for your entire family. All these may be lost due to theft or natural calamities, like earthquake, floods, short circuit or fire.  Unfortunately, if anything like that occurs, the worries about losing your property and setting up all the things all over again, will cause great mental agony.

In addition to protecting your home, the typical home insurance covers your valuable personal property as well.Your personal property consists of the contents inside your home, like furniture, clothing, stereo, computer equipment, jewellery, electronic gadgetry, etc. Outdoor items like sports gear and gardening tools, are also included in the coverage.

Insurance covers against natural calamities, such as fire, lightning, earthquake, landslide, rockslide, flood, inundation, storm, tempest, typhoon, hurricane, tornado, or cyclone. Also, are covered, man-made calamities like damage caused by aircrafts, riots, strikes, malicious or terrorist acts, domestic gas explosions, overflow and bursting of water tank or pipes, and other risks covers. Here the premium is payable annually.

Some policies insure at actual cost of the property while others do it at the replacement cost of such property.

Unless the policy specifically states that property is covered for its replacement value, coverage is for actual cash value.

Riders are also available with these policies which give you add-ons like terrorism cover, which takes care of damages and losses to the structure and / or contents of your home due to acts of terrorism. Also to foot the bill of additional expenses of rent for alternative accommodation. Say, you are forced to shift into an alternative accommodation because your home is destroyed or damaged by any insured peril, the policy will cover you against the additional rent.

Keeping exclusions in mind

So you know all that a householders’ policy can cover you for, but it is important to know all it doesn’t cover — exclusions. After all insurance is about inclusions and exclusions. Damages done due to willful destruction of property, loss, damage and destruction caused by war, wear and tear, atmospheric conditions, etc, losses if your home has been unoccupied for more than 30 days, cash, bullion, paintings, works of art and antiques, and loss to the structure and / or contents of your home due to acts of terrorism, are NOT covered.

Now that you are ready to insure your home, keep in mind to account every factor, big or small, not just the premium alone.

Most important, get quotes from various companies and then decide.While going forward for this kind of a policy, one should not forget to get all the inventory valuation. This would form as a great support while in claim, along with those bills and other backup which you have stored. The reason for the valuation report is that if it done through the specialist then it will be lesser contestable.

The writer is a certified financial planner at Apnainsurance.com, a comprehensive guide to insurance in India that enables customers to search the policy cover they need. He can be reached at kairav@apnainsurance.com.