Home insurance is intended to protect homeowners from any damage to the house and its procession, and it can be taken for a fixed period. Here is everything you need to know about home insurance.
Types of home insurance in India
Homeowners are usually faced with two options for home insurance in India:
Basic fire insurance: This is the most basic policy and covers damages caused by fire as well as natural disasters like landslides, cyclones, etc. A lot of homeowners choose this policy as it offers protection for many common risks.
Householder’s package policy (HPP): If you want more comprehensive coverage for your home, you can choose a householder’s package policy. Apart from the risks that a fire insurance policy provides, HPP also includes missile testing, gas or water pipe explosions, landslides, terrorism, riots and more.
What is the amount covered?
The amount you can receive as insurance will not be the same as the market value of the property. Instead, it takes into account the cost of rebuilding the house or compensating for the damaged assets in the house. You can calculate the amount that will be insured by multiplying the total built-up area of your home with the construction cost (not the market value) per sq.ft. Your builder will be able to tell you what the construction cost of your home is. The valuables within your home, however, will be insured based on their current market value. While you will have to pay a premium as your home insurance, this will prove to be one of the important money-saving tips for your home in the case of any unforeseen damage.
How to apply for a home insurance
Applying for a home insurance is very simple, with many banks allowing you to do it online. These banks also offer easy-to-use insurance calculators that can help you determine the exact amount which can be insured. You can go through the available policies, select the one that fits your needs best and also choose add-ons for extra-coverage. After you submit your application, a representative from the bank will get in touch with you for further details.
How to claim your insurance
In the unfortunate instance that your house does suffer damage, you can take comfort in the fact that it is insured. After making sure you and your family are safe, call your insurance provider and explain the incident to them. Some will also require you to take pictures of the damage caused. Depending on the amount claimed, you might have to submit relevant documents as proof. In many cases, the insurance company will send an agent to your house to check whether the claims made by you are genuine. Once everything has been verified, they will process your claim and disburse the money to you.
Areas not covered by a home insurance
Home insurance packages do not offer end-to-end coverage for every event. This is why you should ensure that you read the terms carefully before selecting a policy. Some of the common events not covered by a home insurance policy include:
- Intentional damage by the policyholder
- Damages suffered during war
- If a house is used for business purposes (this includes tuitions being held in the house, a home bakery, etc.)
- Damages caused by poor structural quality of the building construction
It is also important to remember that your home loan insurance needs to be periodically renewed. Depending on the insurance policy you choose, this could be a period of 5-10 years. Renewing your policy is very simple and can be done online. Being punctual with your insurance renewals is a very important tip for first-time home buyers
Home insurance vs. Housing Society insurance
If you have bought an apartment in a residential complex, then you might have had to pay a certain amount for housing society insurance. While this may sound very similar to a home insurance, the two are actually quite different. A housing society insurance covers only the structure of your home, while a home insurance can also cover the components and personal possessions inside it. This means that if there was an earthquake and your house was damaged, housing society insurance will only compensate for the damage done to the exterior structure of the house. A home insurance, on the other hand, will also cover any damage done to your appliances, personal effects and more. This is why homeowners are always advised to get a home insurance in India even if they already have a housing society insurance.
Making sure that your home is properly insured is one of the most important steps a homeowner should take. Since your home insurance approval also depends on the construction quality of your home, it is very important to choose a reputed and trustworthy builder to buy a home with. At Lancor, we ensure that each of our homes meets the highest standards of quality. This attention to detail is evident in each of our projects in Chennai.