Home Insurance

On the House

Don’t leave it to chance when it comes to your house—insure your house against risks to the structure and possessions inside.

 For most people, purchase of a house is the biggest financial outgo. House owners take pride in showcasing their homes and all the things that go into making it live-able. Yet, chances of insuring  the house against perils are next to nil. These days, incidents of floods and earthquakes are common; and both these natural calamities impact our homes. Imagine your favorite sofa or rug floating in your flat because of excessive rains or your TV getting spoil because of a short circuit.

One can never be sure of when disaster strikes, but we can definitely cushion the financial implications of such mishaps with a householder’s insurance policy. It protects your house from unwanted, unforeseen causes that can damage it, such as fire or lightning and smoke, storms of all kinds, explosions, riots or civil commotion, burglary, breakage of glass, vandalism, hooliganism and vindictive mischief. There are also some other risk covers that you can include in the policy to increase the scope of insurance under it such as public liability, employee compensation if you have servants at home and also cover for the contents of the house, such as TV, geyser, refrigerator, air-conditioners and even your clothes and jewelry.

What you get

 The basic policy comes with two sub-sections: one that covers the building and the other its contents against fire and allied perils. If you live in a self-owned house, at the very least, you should look to buy cover under both these sections. However, if you live in a rented house, you can’t insure the building, but you must take insurance for the contents, as you have insurable interest in them.

When it comes to structural damage, which could be due to natural disasters and fire, you will be compensated to the extent of costs incurred to get back your house under order. For instance, in case of fire in the house due to short-circuit which you manage to control without allowing the fire to spread or damage the contents,  the walls get a coat of soot in the process—the policy will pay for the paint job needed to get the interiors of your house back to its  pre-fire state.

Word of caution

 In your excitement of deciding the possible insurance cover for your house, do not go overboard by covering everything. Make a start by insuring the structure for its worth, not the sale value of the house. Insurers can help you arrive at this value. Next, list all the essential contents inside your house. Remember to include electrical and electronic items, as in the case of your TV or fridge, lest they become a victim of voltage fluctuation. In case of breakdown you can claim reimbursement on repairs or repayment, depending on the scope of the cover. Post listing, assign a value which is equivalent to the replacement value and not the depreciated value. The reason to go for the replaceable value is to ensure that in case of a total loss or repairs, you are able to get the right price for your possessions.

Now, if you are wondering that the cost of the policy will be very high, do not worry. For instance, if the structural value of your house is worth Rs. 20 lakh and the contents worth Rs. 5 lakh, an insurance policy against all perils will cost you about Rs. 5,000 annually. These days, insurers also offer this policy for a block of 2-3 years, which is advisable. So, do not leave things to chance; take this policy at the first instance, especially when a financial cushion is available for your home and its prized possessions

 What are the essential covers that one should look for when insuring their homes?

 Home insurance covers damages to the structure of your house due to perils such as fire, flood, lightning and earthquakes. You can also cover damages to the contents and valuables. Some important coverage’s include building and household contents, burglary and theft, valuables, breakdown of domestic appliances, personal accident, baggage cover, employee compensation, additional expenses of rent for alternative accommodation, loss of rent, etc.

What is unique with USGI’s householder’s policy?

 USGI’s householder’s policy is a package policy designed to cover various contingencies a common householder is exposed to. This policy allows home contents under Fire & Allied Perils Section to be insured on first-loss basis choosing from the first loss percentage options as 25%, 50%, 75%, and 100%, where you get coverage at a lower premium; insurers will not penalize you for under insurance in case of a claim. It aims to offer all necessary insurance at a lower premium under a single policy.

How easy are claims on home insurance policies?

 The claim process for home insurance is straightforward. In the event of any claim, you need to inform the company and register the claim at the earliest, with details of the nature of loss, location of loss, amount of loss and policy number for the reference. On filing of claim request, the insurance company will send a surveyor to your property. Once all the necessary documents for processing of claim are received, your claim will be processed.

Why can’t tenants insure the homes they live in?

 Tenants cannot insure the home where they live in because they don’t have insurable interest to the home. Any loss happens to the structure, the loss will occur to the owner. Tenants can solely opt for content or burglary coverage, he/she has the right of ownership for the contents only.

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