Category: Financial Planning

What is to be considered in Home Insurance

Property Insurance is a banking product, which allows the policy holder to secure their house and its contents against risks like fire, theft or earthquake.

There are two types of home insurance policies in India:

1) A basic fire protection policy and

2) A comprehensive policy called the household package policy.

Benefits of Home Insurance

Comprehensive coverage to both content and structure of home in case of natural and a few man-made disasters.

  • Secure assets.
  • Relieves the policy holders of worry from mishap consequences.
  • Timely insurance payouts allow families to go through rebuilding process quickly, helping them to move on and get back to their normal lives.

Tips for Choosing a Home Insurance in India

  • Premium and coverage : Firstly, one should evaluate risks which a home is facing or might face in a future. For example, if living in a flood prone area the home insurance policy should be covering these risks also.
  • Claim settlement ratio :A good company is judged by the turnaround time of settling claims and it is worthwhile to check the claim settlement record of companies before zeroing in on one insurer.
  • Company’s reputation : It is always prudent to choose a company who is well equipped to assist at any point of time.

Inclusions in Home And Property Insurance

Home insurance covers losses to the structure and content of the home due to natural and man-made calamities.

Fire and perils cover-

  • Aircraft damage
  • Fire
  • Lightning
  • Riot, strike
  • Storm, cyclone, flood
  • Missile testing operations

Earthquake Cover

The policy offers coverage against loss or damage to any of the insured property. However, many policies do not cover flood or overflow of the sea, rivers and lakes due to earthquake.

Burglary and Theft Cover

The contents of home are also covered against burglary or theft. The coverage will also be extended to silver articles, jewellery, precious stones and other valuable items, provided these are kept in a locked safe within home premises.

Exclusions in Home Insurance

Loss or damage caused by wear & tear and depreciation

  • Loss of cash
  • Loss or damage caused by war, invasion, act of foreign country
  • Loss or damage caused by nuclear war
  • Loss, destruction or damage caused to any electronic equipment due to over-running or excessive pressure

Types of Home Insurance in India

The primary and most popular types of home insurance policies offered in India have been listed down, in a comprehensive manner.

Standard Fire and Special Perils Policy

This coverage can be bought by house owners (for their own house) and also by tenants residing in a rented house. A Standard Fire and Special Perils policy covers the insured home against loss and damages caused due to following causes:

  • Natural calamities like lightning, fire, volcanic eruptions, bush fire, forest fire, earthquakes, storms, floods.
  • Damages caused due to explosion/implosion, man-made anti-social activities like strikes, riots, damage caused with malicious intent
  • Damage caused by direct contact of rail/road, vehicle. Damage caused due to the insured house, with your own vehicle, is not included in this cover.
  • Damage caused due to bursting or/and overflowing of water tanks, pipes and apparatus
  • Subsidence including rockslide and landslide
  • Missile testing operations
  • Damage caused due to leakage from automatic sprinkler installations

Home Structure/Building Insurance

This type of home insurance covers the structure of the house from any kinds of dangers and risks. In addition to this, the policy also protects any permanent fixtures within the house. This includes kitchen and bathroom fittings, and also the ceiling/roof of the insured house. Some houses have garages, an outdoor room/house or sheds. This type of insurance usually extends to these structures as well.

Public Liability Coverage

If any guests or third party experience damage caused to them or their property inside the insured’s home, then this type of home insurance policy provides coverage against the same.

Personal Accident

This type of home insurance covers the person and his/her family. A compensation is given in case of permanent disablement or death of the insured person due to accidental or physical injury, even if it has happened anywhere is the world.

Burglary & Theft

In case of an occurrence of burglary or theft in the insured house, if any valuable contents are stolen or damaged, the policy covers one for it.

Contents Insurance

This type of home insurance policy protects the goods inside the house from damages and loss owing to theft, fire, flood and other such mishaps. Documents, portable equipment, jewellery, TV, refrigerator, etc. are covered. It helps to replace the interiors of house if it is flooded, or has been burnt to ashes by break out of fire.

Tenants’ Insurance

This type of insurance is a must have for every tenant so as to protect their contents.

Landlords’ insurance

A landlords’ insurance policy covers things like loss of rent and public liability.

How to File for a Home Insurance Claim? 

Almost every insurance company is having its own deadline within which one must inform about the loss. These can vary between 7-15 days. Some companies also allow this to be done with an email or SMS. Before filing for a claim, one must lodge an FIR and the copy has to be submitted with insurance company. Apart from FIR report, the below other documents are to be submitted:

  • Fire brigade report
  • Medical Officer’s Certificate for death or disability
  • Investigation report by police
  • Suppliers original invoice for replacement
  • Invoice of owned articles, if any
  • Repair estimates
  • Court summons

 List of best Home Insurance Policies in India

HDFC Ergo Home Insurance:  The key features of this cover include

  • a comprehensive cover for risks of fire, lightening, burglary, earthquake and even terrorist attacks.
  • discount up to 25 % and an additional 15%, provided they have installed security systems at their house.
  • The claim process is relatively quick. After a claim is filed, a surveyor will contact the affected person in 48 hours. A claim form will be sent to the correspondence address within 7 working days and the claim will be processed as soon as possible.

ICICI Lombard Home Insurance:  Its key features include

  • a structured cover of house and its contents for a period of up to 10 years and 5 years respectively.
  • up to 50% discount on structural cover and a 25% discount on contents covered under applicable conditions.
  • quick policy subscribing and claim process. ICICI Lombard Home Insurance processes claims within 7 days of receiving the requisite documents.

Tata AIG Home Insurance: Tata AIG provides four types of home insurance namely Instachoice, Home Secure Supreme, Standard fire and special perils, and Home Coupons. Starting with Insta choice, the application process is simple and does not require documentation. Home Secure Supreme not only covers appliances as old as 8 years but also provides jewellery cover. Home Coupons provides cover for acts of theft and terrorism. Lastly, Standard Fire and Special Peril, the name itself speaks for the add-ons provided. Tata AIG provides Home Insurance at a nominal premium, which is a very important feature of any insurance scheme.

So Get Ready, Get the Home Covered. It takes years to build a house – so extend its life with the right home insurance plan!

Debalina Roy Chowdhury

Dilzer Consultants