The ultimate guide to home insurance

Our homes are amongst our most expensive and important assets. Many of us invest our life savings to build a home and we all wish our homes always remain safe. We take many measures to ensure the safety of our homes, like installing security cameras, locking the doors when we leave home, installing proper electrical settings to avoid any mishaps, etc. While these ways of securing a home are popularly known, there is one more, lesser known, efficient way of securing your home - home insurance. This article aims to give you a clear understanding of home insurance.

What is home insurance?

Home insurance helps you safeguard your home against unforeseen events like natural calamities, thefts, fire explosions, etc, that often lead to huge financial losses.

What does home insurance cover?

Coverage for structure: A basic home insurance policy covers the structure of your home against manmade & natural calamities like earthquakes, floods, lightning, fire, etc.

Coverage for contents: Depending upon the insurance plan, the policy also covers the content of the home which include electrical and electronic appliances such as fridge, TV, AC, refrigerators, etc. It also includes portable equipment, furniture and fixture. You can also cover valuables like jewellery, works of art and curios separately.

Apart from the basic coverages, insurance companies offer various add-ons which can help you enhance the coverage.

Coverage against public liability: If a third party gets injured due to an accident at your home or a third party’s property gets damaged due to a reason attributable to your home, then the add-on will cover against the third party liability that may arise. Let us understand this with a simple example - suppose Mr A & Mr B are neighbours. Mr A is getting his home renovated & the repair work causes damage and loss to Mr B’s house. Mr A’s liability in such an incident gets covered if he has this add-on.

Compensation for alternative accommodation: If your house is inhabitable due to any natural calamity and this causes you to move to alternative accommodation, the cost of transport and packing gets covered.

Loss of rent: In case your tenant had to move out of the property due to an unforeseen event, the add-on will compensate you for the loss of rent.

Key & lock replacement cover: In case the keys of your home get stolen, you will get compensated for the locksmith’s expenses.

Terrorism cover: This optional cover will protect you against any losses that may arise due to a terrorist attack.

Apart from the add-ons mentioned above, a few insurers also provide loss of wallet cover, ATM withdrawal robbery cover, employee compensation cover, etc. You may opt for an add-on according to your specific requirement in exchange for a nominal premium.

Who can buy a home insurance policy?

If you are a homeowner, then you can purchase home insurance. If you rent a home, you can buy home insurance to cover your belongings. An organisation that owns a property can also take home insurance coverage.

Factors to keep in mind before purchasing a home insurance policy: Today, many insurers offer home insurance policy; it is important to evaluate your requirement and accordingly choose a plan that best suits your needs. You can always further bolster your cover with apt add-ons. Carefully read the terms and conditions of the policy to get clarity on the cover offered by the insurer. It is advisable to opt for an insurer that is known to settle claims smoothly and swiftly; it will ensure that you experience a hassle-free claim settlement in case of an eventuality.

Always remember that the cost of insurance is very low compared to the amount of loss that may arise in case of an unforeseen event.

(The writer is Chief Distribution Officer – Retail Sales, Bajaj Allianz General Insurance)