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Home Insurance in India

Last Update Date : April 30, 2019
Estimated Read Time: 9 min

Home Insurance policy is a very powerful tool that would protect the house owners and tenants from unexpected natural and man-made calamities, earthquakes, floods, theft, accidents, damages/loss etc. The protection cover is provided to the house property along with its contents by the Insurance companies towards the premium paid by the Insured against any risks. Any individual as per his requirements can opt for either a specific peril insurance or a comprehensive policy coverage by getting quotes from top insurance companies like HDFC Ergo, Bharati AXA, National Home Insurance, SBI Home Insurance, New India Home Insurance etc.

Concept of Home Insurance

In this age of increasing calamities, one can get ready to allot some funds for insuring home and avoid financial loss later. So, a home where we live with our family has to be safeguarded from various threats like natural calamities; loss occurred due to earthquake, fire, theft, accidents, riots etc.

Home insurance or Home Owner’s insurance is an insurance policy that covers an individual’s house/assets and protects all homeowners against any loss, damage or disaster. It gives cover to both properties as well as liabilities against a single premium.

Benefits of Home Insurance

  1. Protection against natural and man-made calamities – A home insurance policy ensures that the owner is not at any financial loss due to earthquake, storm, floods etc. It also provides cover against some man-made calamities like thefts, strike, anti-social activities that cause any damage or rebuild in case required
  2. Liability Protection – In case of any occurrence of damage or injury along with property damage and harm created to the guests residing in the home, a policy protects you and the house which plays a key role in such situations. It also acts as a saviour in case of any legal problems that arise due to third-party injuries in certain conditions.
  3. Benefit of coverage for loss/damage of assets – A households some important articles, precious contents, jewellery, furniture etc. There are various policies available in the market that also provide cover to these personal belongings along with the protection it already provides to the structure.
  4. Assistance while renovation – In case the house owner is renovating his insured home due to any such damage that needs to be corrected, then he has to reside in a rented property along with his family. In such a situation, the Insurance Company as per the policy provides the rental expenses cover until the renovation is done.
  5. Easy processing of Home Loans – The Banks and Financial Institutions prefer those people whose house is already insured at the time of approving home loan requests by the individuals.

Different Ways to Insure your Home

There are different types of Home Insurance products available in the market to suit the needs of customers in India. Let’s have a look at different types of insurance offered by leading Banks or Insurance Companies to understand the scenario.

Standard Fire and Special Perils Insurance

All of us have innumerable memories in our home, and along with home insurance, it’s also important to safeguard from fire accidents, unexpected perils or threats, earthquakes, floods etc. The Standard Fire and Perils Insurance policy can be taken by both owners as well as tenants, housing societies. Here are few highlights or features of this policy towards the loss and damage caused to the property in the situations as listed below:

  1. Risk against natural calamities like Floods, Storm, cyclone, lightning, Earthquake, Explosion etc.
  2. Damages caused due to riots, strike, explosion, man-made social activities, missile testing related loss, Aircraft damage etc.
  3. Damages due to the bursting of water tanks, pipelines etc.

Building / Structure Insurance

This insurance protects the structure of the house, permanent fittings & fixtures, ceiling/roof from all kinds of risk factors. The homeowners can get the benefit of protection for all the other structures including fencing, parking garage, extended roof, pool houses, sheds, in case of any damage or repairs. The add-ons may differ from one insurer to the other, but the basic components of coverage remain the same.

Public Liability Coverage

Public liability insurance covers the risk or loss that occurs to the guests or their property while residing in the insured person’s home. This policy protects against any injuries or damage caused to the third party or their liabilities.

Personal Accident Insurance

In case of any injury that is caused due to any accident or in case of any event of the insured person, the compensation is paid to the insured family. It acts as a cover to the insured as well as his family.

Package Policy Insurance

As the name suggests, this insurance policy covers all the contents of the house like refrigerators, TV’s, gadgets, Jewellery, any other valuables along with protection to the structure of the house as a package.

Fire Insurance

Any loss or damage caused to the building structure due to Fire, Lightning, Explosion, Terror Activity, Bush Fire, landslides etc. But any damage that occurs due to war, damage due to electrical machines, short circuit, pollution, etc., are not covered in fire insurance based on the insurance provider.

Burglary Insurance

Under this insurance, any occurrence of loss to the insured property like housebreaking by burglars during a theft, forced entry damaging the house, etc are covered by the insurance provider. It’s a common practice that people store their valuable items, documents, jewellery, etc., in their house. In this present age, there is no option of safety through we store them, and, in such cases, this insurance comes handy to protect the homeowners from financial stress in case of any event.

What is not covered in Insurance?

  1. Damage/loss to property due to war
  2. Physical currency money
  3. Damage caused to the property willfully or intentionally
  4. Any damage caused to the property that is vacant for a specific period
  5. Depreciation or wear and tear
  6. Damage/loss occurred during cleaning or restoring process

Tips for Choosing a Home Insurance

Let’s have a look at certain points that need to be considered while opting for a certain home insurance policy to secure your dream home. Today we have number of options available in the market but below are few things to take care of while buying the policy.

  1. Know your requirements: Whether it’s the home owner or tenant, both has to check on the features of the policies depending on their requirements and the condition of their house. For example, a tenant need not take a policy that gives protection to the structure of house instead can opt for a policy that protects his contents and valuables.
  2. Know the Insurance Provider: We have number of providers who offer various policies to the individuals as per the needs and requirement. But before going ahead, its always recommended to know about the Company / Insurance Provider, process time and claim settlement process, easy options to renew or exit etc.
  3. Terms and Conditions: This is very important before confirming on a certain policy that you go through the policy document along with its terms and conditions. One has to allot some time to go through all the points like what are the charges included as part of premium, loss coverage, renewal dates etc.
  4. Comparison of Insurance Providers and their Policies: At times, we take more time in buying petty things at super markets, grocery shops, etc. It requires more attention while selecting a policy for your dream home that suits your requirements out of different options available in the market.
  5. Riders to extend policy cover: Riders are the add-ons to the actual insurance policy which you can choose as per your requirements
  6. Do Homework: After shopping around on various insurance companies, policies they provide, self-requirements, house condition, riders required, financial stress etc. has to be compared before you finalise on a certain insurance provider’s policy. It’s always recommended to do some homework irrespective of the details shared by the company executives. This will always ensure the process of buying home insurance smooth and will help you to select the right policy along with affordable premium.

Policy Coverage and Claims

Different types of coverage are provided in various home insurance policies by the insurance companies.

Type of CoverageDescription
Personal Property in the houseHere the coverage is offered to personal belongings, contents in the house etc. that are insured
Loss/Damage to House propertyThe policy based on features with different providers in the market provides cover to the damages caused to the house due to fire, accident etc
Living ExpensesThe policy provides all the living expenses in case the insured is residing at a different property during renovation
Comprehensive Personal LiabilityThis feature helps the person in case of any claims by third parties on his rental or own property
Medical ExpensesThis cover ensures that the medical treatment costs against any accident or injury is provided by the insurance company
Other Structures CoverageHere the policy covers all other structures of the house like shed, garage area, compound fencing etc.

Settlement of Home Insurance Claim

The Insured buys an insurance policy to protect his house property and belongings against any damage or loss occurred due to any unexpected natural calamities, accidents etc.

In such a situation, the Insured will raise a claim against the loss and submit to the Insurance Company. Depending on the company, policy terms and conditions, etc. the settlement process may vary between different insurance providers. It is recommended to adhere to the procedure to ensure a smooth claim settlement process.

The procedure may include:

  1. Informing the Insurer on the occurrence of any event, damage or loss to the house property
  2. All details of the home insurance policy along with the relevant documents have to be correctly furnished by the Insured
  3. A surveyor appointed by the Insurer in certain situations will go through all the documents submitted like Title Deed, Bills, list of stolen contents, policy document etc.
  4. After the observations are made, then the Surveyor submits the details to the Insurer who verifies all the details as per their procedure
  5. After approval, the claim amount will be settled and credited to the Insured bank account by the Insurer.

People Also Ask

Q. Who can buy a home insurance policy?

A. Any individual either a homeowner or a person living in a rented property can take a home insurance policy to protect his house along with the belongings from any unforeseen loss or damage.

Q. Can I buy an online home insurance policy?

A. One can compare different insurance providers and buy a home insurance policy online that would save time, brokerage to agents etc. All the research work, policy features, charges, premium, loss/damage covered, policy document along with terms and conditions have to be thoroughly gone through before buying a policy from well-reputed insurance providers to avoid any further complications.

Q. What if a tenant insures contents of home after which he moves out to another place?

A. In case anyone gets enrolled for a home insurance policy and moves to another house/place on rent, he can get the change of address done and continue the policy

Q. What are the factors considered while deciding the insurance premium?

A. The premium amount will be based on various parameters like – the total insured amount of the house property, tenure of policy, construction costs & built-up area, insured amount, total value of contents in the house, etc.

Q. What is not covered in Home Insurance Policies?

A. The home insurance policies may change from region to region or from state to state based on their conditions. It’s recommended contacting the vendor directly to get the accurate information.

Q. Is there any tax benefit available towards the home insurance premium?

A. There is no such benefit available for paying the home insurance premium. But it’s always recommended to take the necessary measures to avoid financial loss or damage to the house property.

Q. Will home insurance cover the ancestral property?

A. The Insurance Company or the Insurer may have different clauses when it comes to the insurance cover for old and ancestral buildings. They can provide the right information that would enable a person to choose the right policy.

Q. Can I switch between two insurance providers while one policy is active?

A. A person can opt for a second home insurance policy by informing the new Vendor about his previous policy without losing accumulated benefits.

Q. How can I pay the home insurance premium?

A. One can pay the premium online from the insurance provider’s website, through cash/DD/cheque or through offline by visiting the branch of the insurance company.

After getting a fair idea on home insurance, its benefits, tips on opting a policy etc. one has to ensure that the house where we spend our life along with our family has to be protected accordingly. It helps from huge financial loss or stress and helps to have a secured future.

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CA Madhuri Marne
Madhuri is a tax expert at H&R Block (India) with over a decade of professional experience. Having co-authored a book on economics for the ICAI exam, she now enjoys writing about tax-related topics in a simple and easy manner. Outside of work, Madhuri is passionate about teaching students who are appearing for professional exams.

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