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Home Insurance- Need Of Changing Times

Monday, May 11, 2015
By Mukesh Kumar

Mukesh Kumar Executive Director, HDFC ERGO General Insurance.

A House is special for everyone. Other than your health – which is priceless – a house is probably the most valuable asset that an individual owns. A House protects you and your family from a number of uncomfortable situations at all times. It is only fair that you as an owner ensure that your house is also protected from untoward events. You can get this protection with a product that is developed for the precisely the same purpose: A Home Insurance. Just like a Health Insurance policy that provides you a financial security in case of medical emergencies.

A Home Insurance protects your house from the perils of natural and man-made disasters. It also helps you protect the content of the home from getting damaged or stolen. Traditionally, Indian Homeowners’ have not been very keen on protecting houses with Home Insurance. A Home Insurance was considered as an avoidable expense in India till recently. However, times are changing. With rising cost of (house) construction, it is now that the Home Insurance is gaining attention from the homeowners as an important protection product. There have been instances of people having become the victims of natural disasters in which their houses were seriously damaged. Thefts have been common for years; however stakes have gone up of late with homeowners’ preferences for high-value electrical/electronic gadgets.  What can sure be of help in such instances is a Home Insurance.

A Home Insurance comes with numerous benefits and is now becoming an essential requirement for homeowners. For the uninitiated, it sure helps to know what Home Insurance is all about and what is and is not covered under a standard Home Insurance.

With a Home Insurance, you can get your house and/or its contents insured as per your requirement and budget. It comes with a mandatory fire cover – Fire and Special Perils – that protects you in the event of your house getting damaged due to fire taking place at your house due to gas cylinder explosions or shot circuits. Other risks like Lightning, Explosion / Implosion, Storm, Flood, Riots, Strike Malicious Damage, Earthquake etc. are also covered under the mandatory Fire and Special Perils –Building part of the Home Insurance.  The Home Insurance is applicable to any residential building with RCC / RBC / Tiles /ACC roof and walls of burnt brick /stone /concrete. It also covers articles like consumer durable, furniture, personal belongings specified items etc. against fire and allied perils.

Apart from the above-mentioned mandatory cover, Home Insurance also comes with an optional cover to protect your home from the instance of Burglary or Theft. Insurers typically offer 25% discount on the fire section and additional 15% discount on the burglary section (depending upon their policies).

A good Home Insurance plan is designed to provide comprehensive protection to the policy holder, ranging from burglary and other perils, all valuables (watches, jewelry items, gold, silver, clocks, video cameras, musical instruments, etc.), and other valuable items such as Electronic Equipment, Home Entertainment Equipment, Portable Computer/Mobile Phones and Pedal Cycle, Loan Payment Protection, Increased Living Expenses and so on.

While considering a Home Insurance it is important to know what is not covered under a standard Home Insurance policy. Obviously, the value of land is not included in the Sum Insured. Loss by depreciation or consequential loss of any kind, willful destruction of the property, property under construction, kutcha property/construction, resident-cum-offices, resident-cum-shops and resident-cum- warehouses are not covered under a Standard Home Insurance by insurance companies. You must note that the pests are not big disasters that can damage your property the way it happens in the events of earthquake or floods. Hence, insurers do not cover pests in a Home Insurance, but you can always make additional efforts to keep you home safe from harmful insects, cockroaches, flies, etc.

The sum insured under the Home Insurance policy is decided based on the reinstatement value. If you reside in urban area that has lesser risk of riots and terror attacks, then you can exclude these factors from your policy and avail additional discounts against these (if applicable). Home Insurance policies are tailor-made based on the risk involved and suit every budget. With rising construction costs and high-value gadgets that occupy your dream house, it is important to get a Home Insurance, which gives you and your family complete financial protection against any accidental loss.

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