Basics of Home Insurance, its Cover,Importance and its Advantages
Introduction
Let’s start this guide by asking you a question – which is the most expensive material asset that you own? The answer for most equal of us is our – homes. Our houses not only condition us with a place to stay, but it is our most costly asset – ranging from a few lakhs of rupees to even a few crores.
Yet, the most of homeowners fail to insure their homes. It’s common for individuals to insure their cars (as it is compulsory) but skip insuring their homes. This is cause most people do not count their homes as subject to risks.
Opposite to popular recognition, homes all over the country are at risk. The figure of fire accidents, robbery, thefts, recorded every year run from a few thousand to lakhs. Also, newly, we have seen natural accident taking a charge on lives and property in different parts of India. Floods, cyclones, and even earthquakes – there are many of things that may go wrong with your house.
National information show that nearly 48 lakh Indians pass from natural disasters every year, that source damage to properties over Rs. 64,000 crores. Much of North and West India are exposed to earthquakes, placing over 200 million people at risk across 100 cities.
This is where – home insurance come into play. Home insurance is an insurance policy that secure you from financial ruin when you lose the biggest asset of your life in a natural or man-made accident. Here, in this guide, we describe all about home insurance – what it is, types, why you must one, how to select the right home insurance policy, FAQs and more.
What is Home Insurance?
Home is where the heart is, and a home insurance policy helps you protect it.
Home insurance is known by several names – house insurance, property insurance, building insurance, or homeowners insurance. This is an insurance policy that helps to protect your home from damage due to insured events (defined events) mentioned in your policy document. Some of the common insured events include fire, floods, storms, earthquakes, etc.
If your home gets damaged due to a calamity mentioned in the policy document, then the insurance company will provide you with a lump-sum amount to cover the cost of repairing or replacing the damages in your home.
Additionally, the home insurance policy also protects you from legal liabilities if a visitor gets injured while visiting your home.
Home Insurance – Coverage & Exclusions
Home insurance is also name homeowner’s insurance. It protection your bungalow/apartment/rented flat/owned house/built home against possible risks. It protect the costs of damages due to any hapless event. Home insurance can be maintain for damage due to the following source:
- Natural disaster such as windstorms, hails, fire or lightning.
- Man-made issue like riots, theft, vandalism, or property destruction due to any civil commotion
- Damage due to rail or road constructions
- Accident of airplanes or any vehicle (not your own)
- fire or smoke
Coverage offered under Home Insurance Policy
The home insurance policy protect many kinds of damage. For example, damaged electric lines/wires, water pipelines, or structure damage. It also give range for broken windows/doors/floors/walls. Not only the house but also protect for the loss and damage to the contents of the house. It can be mainly divided into four kinds of costs on the insured property as below:
- Interior damage costs
- Exterior damage costs
- Loss/damage of personal assets/belongings from a house
- Coverage for material injuries that may happen while on the damaged property
Home insurance policies may differ in what range they obtain depending on certain factors. It cover according to the residence type (rented/owned) and size of the residence. Other characteristics like age, place of residence, replacement value, and location as well as the cost of effects also matter. Your declare history or crime rate in the area can also matter. Finally, it depends on you what kind of coverage you select. It is your option about the amount of premier and deductible you are ready to pay. The deductible is the amount you have to pay before making the declare if the premier amount falls short of. When the deductible is high, the premier is less and vice-versa.
Exclusions
Although home insurance protect both natural and man-made source, there are few accidents that go discover. For example, there is no range for intentional damages, or damages due to neglect, war situations, or ‘Acts of God’. These include as count. Listing a few of them below:
- ‘Acts of God’ cover disaster like floods and earthquakes are expect in a home insurance policy. Some supplier may come with extra coverages for these disasters in specific instance or customized policies
- Damage develop due to low or zero maintenance and neglect of the property
- No cover for damage due to ant, rodents, birds, rot, molds
- Although there can be cover for fire and smoke in some incidents, it doesn’t cover up smoke appear from industrial or agricultural operations
- If any damage is done by a home member purposely or unconsciously. For example, a accident with one’s own vehicle will not be covered under a home insurance policy
- Any destruction to the property under Ordinance of Law or court’s order
- Damage due to nuclear hazards or war in the country
Why must you have a Home Insurance Policy – Benefits
You must have a home insurance policy because it protect the financial loss. You may also have to bear the damage to property and its effects under order not controlled by you. The interest of a home insurance policy are:
- You can get money aid for repair and damage manage due to hapless events
- If a third party agency damage, you can declare insurance without getting into a legal rift
- It is simple to get a mortgage (home loan) for repair/reconstruction/expansion if there is property insurance
- The costs of loss of home’s belongings and contented can also be covered up. Home effects like appliances, furnishings, furniture, gadgets, or jewelry
- Coverage is there not only for damages due to accidents or disaster but also due to theft, robbery, or burglary
- There are kind of home insurance policies that are designed to serve to express requirements. These policies involve Landlord’s Insurance or Tenant insurance. The landlord can declare the landlord’s insurance when the tenant (public liability) does damage. Also, when there is a loss of occupant payment (rent) due to other reasons. Similarly, the tenant can get insurance for his/her own belongings in a take flat
How to Claim Home Insurance?
In ordering to claim home insurance money, you may need documents and proof for the damage. Documents like police FIR/investigation report and statements from fire brigades/authorized organizations/residential society. Also, medical officer’s certificate of death or disability if necessary. Apart from that, you may must court summons, repair estimates, invoice/proof of owned contented, etc.
You have to pay the certain for making a home insurance claim. The insurance amount you get will depend on the kind of policy you have. It depends if your coverage providing will be based on the actual cash value or the replacement value. It is explained more below:
Actual cash value gives the current value of a house/house item. It debit the devaluation from the cost of the item when it was new. Devaluation is the loss of value of an item/property due to the age and order of the item. Devaluation calculation may depend on the secure item and the insurance supplier.
Expect a television set is insured and is damaged/stolen due to robbery. The insurance amount will be the coverage of the cost of the TV based on its decrease value at the time of the claim
Replacement value coverage means it will cover the actual cost of the damaged property or an item. It will give the insurance amount to replace it
Let’s suppose the damaged/lost television set is 3 years old and coverage is as per its replacement value. Then, one can claim the insurance amount as the cost of the TV set at the time of its obtain. The insurer shall cover the cost of buying/replacing with a new TV set of related condition in place of the lost/damaged one
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