Home Insurance

Your home is a treasure trove of precious memories and cherished possessions. Beyond its four walls, it holds a world in itself with the latest gadgets, exquisite furniture and interiors, and all your prized possessions. It is a physical sanctuary which has monetary value as well as lots of intangible assets like love, laughter, and dreams.

Owning a home is like holding a piece of your dreams in your hands, a testament to your hard work and determination. However, it's surprising how easily some people overlook the need to safeguard this precious investment. It’s important not to let the excitement of owning a home overshadow the importance of protecting it.

Ensuring the well-being and safety of your home is paramount, and one of the most crucial steps you can take is obtaining home insurance. By doing so, you provide yourself with a safeguard against unpredictable and unfortunate events like burglaries, floods, vandalism, earthquakes, and more. Protecting your home from these unforeseen circumstances brings peace of mind and ensures you are covered when it matters most.

What Is Home Insurance?

When it comes to protecting your home and everything inside it, home insurance is the answer. This type of insurance policy offers financial security in case of any unexpected perils or damages.

It is basically a contract between you and the insurance company and ensures that you have the support you need to recover financial losses if something goes wrong with your home. By paying regular premiums, you can secure financial protection for your home and personal belongings in the case of certain specific unfortunate events like fire, theft, vandalism, etc.

Home insurance is a wise investment that safeguards your valuable assets and provides peace of mind during difficult times.

Why Buy Home Insurance?

There are a number of reasons why you should consider buying home insurance -

• To Safeguard Your Investment
  Your home is likely the biggest financial commitment you'll ever make. It's the result of years of dedication and saving. That's why having home insurance is of so much importance. It protects your investment by covering damages or losses caused by perils like fire, theft, vandalism, natural disasters, etc. Without home insurance, these incidents could lead to serious financial setbacks.
   
• To Protect Your Belongings
  When it comes to home insurance, it's important to remember that it not only protects the physical structure of your home but also the things that make it uniquely yours. Just imagine the devastating loss of all your furniture, electronics, clothing, and valuable possessions in the event of a fire or burglary. With home insurance, you can find comfort in knowing that these items can be replaced, helping to ease both the emotional and financial strain of starting over.
   
• For Protection Against Legal Liabilities
  Accidents can occur on your property, and it's important to understand that you may be held legally responsible for any injuries suffered by guests or visitors. Fortunately, home insurance usually includes liability coverage, which can assist with covering medical expenses, legal fees, and damages if someone gets hurt on your property.
   
• To Protect Your Mortgage
  If you have a mortgage on your home, you'll probably need home insurance. This is because your lender would want to safeguard their investment in the property, making sure it can be fixed or rebuilt in case of any damage.
   
• For Protection Against Natural Disasters
  A significant reason to consider purchasing home insurance is to protect your property from unexpected natural events. Disasters such as hurricanes, earthquakes, wildfires, and floods can cause extensive damage to your home. The financial responsibility of repairing or rebuilding can be daunting. Home insurance acts as a safety shield by covering the expenses for repairs or replacements in these unfortunate circumstances, offering you peace of mind and helping you recover.
   
• For Peace Of Mind
  When it comes to home insurance, one of the best things about it is the peace of mind it brings. It's hard to put a price on the feeling of security that comes from knowing you're financially protected. No matter what life throws at you, big or small, having that safety net in place can help ease your worries and reduce stress.

Expenses Covered By Home Insurance

Home insurance plans cover expenses associated with physical loss, damage, or destruction to your insured property due to various factors. Some of them are as follows -

• Fire-related events.
• Earthquake, volcanic eruption, storms, typhoons, floods, landslides, and other natural calamities.
• Explosion and implosion.
• Lightning.
• Subsidence/sinking of the land on which the house stands.
• Damage by way of impact or collision because of any external object like falling trees, aeroplanes, walls, etc.
• Automatic sprinkler leakages.
• Missile tests.
• Riots, strikes, or any malicious damages.
• Bursting or overflowing water tanks or any associated apparatus/pipes.
• Theft. This is covered within 7 days of the incidence and an insured peril should be the proximate cause.
• Repainting of the building due to sudden and accidental smoke, whether it originates from within or outside the premises. However, smoke from fireplaces is not covered.

Note: The coverage can vary across different plans.

Expenses Not Covered By Home Insurance

Some expenses may not be covered by home insurance. Like -

• Loss or damage to the insured property due to burning ordered by a public authority.
• Misrepresentation or non-disclosure of important information.
• Deliberate acts or omissions by you or anyone acting on your behalf.
• Pre-existing damages to contents and building.
• Loss or damage to a building caused by structural defects, latent defects, poor maintenance, or workmanship.
• Loss or damage to electrical, mechanical, and electronic items due to manufacturing defects, for which the manufacturer is responsible.
• Loss or damage resulting from any dismantling/fitting adjustment/repair alteration/modification that is not approved by the makers, manufacturers, and/or their agents.
• Loss or damage caused by using the said property against the directives of the makers, manufacturers, and/or their agents.
• Breakage, cracking, or scratching of fragile items like crockery, glass, cameras, binoculars, lenses, musical instruments, and sports gear (unless caused by fire or accidental external means).
• Over winding, denting, or internal damage of watches and clocks.
• Loss or damage that is liable to be repaired or covered by a third party under a contract or agreement.
• Any loss/damage to items like money, manuscripts, stamps, travel tickets, etc.
• Loss or damage to business books or documents, plans, designs, blueprints.
•  Loss or damage to credit/debit/ATM cards and club membership cards.
• Loss/destruction/damage to any things of consumable nature.
• Loss/destruction/damage directly resulting due to pressure waves from aircraft and other aerial devices at sonic or supersonic speeds.
• Theft of items outside your home or attached to the outer walls or roof, unless securely attached.
• Peculiar and mysterious disappearances and losses that cannot be explained in any way.
• Loss or damage caused by war, invasion, rebellion, or other acts of violence.
• Loss or damage caused by ionising radiations, contamination by radioactivity, nuclear fuel combustion, nuclear waste combustion, or nuclear weapons material.

Note: This can vary across different plans.

Coverage Offered By Home Insurance Plans

Now, let’s understand what coverage is provided by home insurance plans -

1. Home Building Cover
   A Home Building Cover is crucial component in any home insurance policy. It shields your home's structure, fixtures, and permanent fittings from risks like fire, natural disasters, vandalism, and more. It's important to have this coverage to protect your home against potential damage.

• What Does It Cover?
  Main residential structure and fixtures permanently attached to the house such as electrical wiring, plumbing, and built-in appliances are included in this coverage. The coverage also includes other structures on your property, like garages, domestic outhouses used for residence, gates, verandahs, septic tanks, air conditioning systems, central heating systems, and more if these are not included in your home contents cover.

• Key Requirements
  To be eligible for this coverage, your house needs to be used primarily for residential purposes. This means it should be occupied for residential use either by you, your family, tenants, licensees, or employees. The house shouldn’t be utilised for purposes that are non-residential in nature or be used only as a holiday home, the exception being the use of the house as a palace of residence as well as work in situations that call for the same, like lockdowns, etc.

• Amount Payable
  Let’s have a look at the amount payable by the insurer. If your home is completely destroyed and determined to be a total loss, the maximum money you will be paid is based on the cost of construction when your home insurance plan’s coverage started.
• If your home is damaged by an event that’s insured, the policy will reimburse it to fix it back to how it was before the damage.
• If your home building is a total loss due to a covered event, you will get the sum insured under your Home Building Cover.

2. Home Content Cover
   A Home Contents Cover is crucial for safeguarding the personal belongings that are in your home. It includes protection against loss, damage, or destruction caused by insured events. Some components are automatically included, while others are optional based on your preferences and the specific policy you choose.

• Liability of the Insurer
  If your contents are damaged or lost due to insured events, the insurer will -
   

• Reimburse You For Repairs
  If your belongings can be fixed, the insurer will cover the cost of restoring them to a condition similar to how they were before they got damaged.
   
• Give You Replacement Costs
  You may receive payment from the insurer to replace damaged items with similar or the closest available alternatives.
   
• Restore Them
  The insurer may cover repairing the damaged items to the condition similar to how they were before.
  The maximum amount you will receive under the Home Contents Cover if your home contents are lost or destroyed is stated in your policy schedule. The policy may also contain sub-limits for certain items.

3. Optional Covers Under Home Insurance
   You can also choose from these optional covers for extra protection -

• Cover for Valuable Contents on Agreed Value Basis
  You might own precious items like jewellery, paintings, sculptures, pottery, etc. in your home. These items hold great value, both financially and sentimentally. With this optional coverage, you and the insurer can agree upon a specific value for these valuable belongings, typically based on a valuation certificate.
  If, unfortunately, something bad happens, like a fire or theft, and your valuable things get damaged, the insurer will cover the expenses incurred in repairing them. If they can't be fixed, the insurer will give you the amount of money you agreed on for those things. Just remember, if your policy has limits for certain items, that's the maximum coverage the insurance company will pay you.
   
• Loss of Rent & Rent for Alternative Accommodation
  If your home becomes unlivable because of a covered event like a storm or fire, you might have to find temporary shelter somewhere else. That's where this optional coverage can be really useful. If your home becomes unlivable because of a covered danger, this coverage can help you pay for rent expenses. If you're a tenant and have to pay a high rent for a temporary place, the insurance company will cover the extra cost.
  The coverage has certain terms and conditions. For example, if you need alternative accommodation, it should be in the same city.
   
• Personal Accident Cover
  This add-on gives you extra protection. If your home is damaged by covered perils like fires, storms,  etc., and this causes the unfortunate death of you or your spouse, the insurance company will offer compensation as stated in your policy. And, if the insured person passes away, this personal accident cover will continue for the spouse until the policy ends.
   
• Loss Minimisation
  This coverage is really useful when you need to take quick action to stop more damage to your property after an unfortunate peril that’s covered. By paying a little extra, you'll be covered for reasonable costs to protect or move your property to prevent more damage after an insured event. Usually, this coverage will pay up to a certain percentage of the sum insured for the said item.
   
• Hardship Allowance
  In tough times, you might find yourself facing unexpected expenses due to an unfortunate situation. That's where the hardship allowance comes in. It's there to help you cover emergency purchases like food, medicine, clothing, and other essential items. This way, you can better manage the immediate effects of a disaster.
   

A Standard Home Insurance Plan By The IRDAI

In January 2021, the Insurance Regulatory and Development Authority of India (IRDAI) introduced guidelines for a standard house insurance plan called Bharat Griha Raksha (BGR). This policy aims to provide affordable coverage for residential properties. All general insurance companies are required to offer this policy, and most insurers have started providing it from April 1, 2021. With this policy, you can protect your home and its contents from damage or loss caused by fire, theft, natural disasters, and more.

Who Should Buy Home Insurance?

Go for home insurance if -

• You are a homeowner
  If you own a house, getting home insurance is a must. As a homeowner, your property is likely one of your biggest investments. So, it's important to protect it with a good insurance plan.
   
• You’ve taken a mortgage on your home
  If you've got a mortgage, your lender will usually want you to have home insurance. They do this to protect their investment in your property. They want to make sure that if anything happens to your home, it can be fixed or replaced, keeping its value as collateral for the loan.
   
• You live in a disaster-prone zone
  Natural disasters are completely unexpected and can wreak havoc on your house. You must’ve seen innumerable videos of roofs flying off in cyclones, houses falling off cliffs due to hurricanes, and sturdy structures washing away with floods. Making it super important to protect your home with home insurance. It's crucial for your peace of mind and financial stability.
   
• You are a tenant
  If you're renting a home or apartment, it's important to think about getting insurance for your possessions. Even though you don't own the property, having a policy can cover your belongings, provide liability protection, and more. This way, you'll be financially protected if any unexpected events happen while you're renting.
   
• You own valuable assets
  If you have valuable assets in your home like artwork, jewellery, or top-notch gadgets, you should think about getting extra coverage or a separate rider along with home insurance. Standard home insurance policies may not fully protect these high-value items, but specialised coverage will ensure they are adequately protected.
   
• You want peace of mind
  Looking for peace of mind and financial security? Consider getting home insurance. Life is unpredictable, and accidents or unexpected events can happen to anyone, anytime. Home insurance acts as a safety net, helping you and your family recover from setbacks without facing overwhelming financial burdens.
   

Factors that Affect Home Insurance Premiums

Let’s consider some key factors that impact your home insurance premiums -

• Location
  When it comes to your home insurance premiums, location is key. Insurance companies carefully evaluate the risk of your geographical area. If your home is in an area prone to natural disasters such as cyclones, earthquakes, landslides, etc., you can expect higher premiums. Similarly, areas with higher crime rates may also lead to increased premiums.
   
• Value of your home
  The value of your home and the cost of its replacement play a big role in determining your home insurance premium. If you have a larger, more valuable home with high-quality material, you'll need more coverage and may have a higher premium.
   
• Home construction material
  The materials used in constructing your home can affect your insurance premium. If your home is built with fire-resistant materials, you may enjoy lower premiums. However, if you have an older home with outdated electrical, plumbing, and heating systems, your premiums may be higher due to increased risks.
   
• Roof condition
  The condition of your roof is crucial in determining your premium. If your roof is in good shape and made of durable materials like metal or tile, you can expect lower premiums. However, if your roof is older or deteriorating, it may result in higher insurance costs for you.
   
• Home characteristics
  Some characteristics of your home can impact home insurance premiums. Factors such as how old the building is, additional structures, and the value of the property all play a role in determining the price you pay for home insurance. Older houses, for example, may have a higher risk of damage, leading to higher premiums. However, when it comes to insuring a newly constructed property, you can expect lower premiums. Keep in mind that additional structures like swimming pools, clubhouses, and garages may increase the overall cost of your home insurance.
   
• Deductibles
  A deductible is a sum of money you pay before your insurance coverage starts. A higher deductible can lower your premium, but just ensure that you can comfortably afford the deductible if you need to make a claim.
   
• Your choice of coverage
  When choosing your coverage, keep in mind that it can impact your premium. Higher coverage limits mean higher premiums. It's important to find the right balance between protecting your assets and staying within your budget.
   
• The precautions you take
  If you want to lower your home insurance premiums, there are a few factors to consider. By taking precautions to reduce the risks associated with filing insurance claims, you can significantly decrease your premium amount. Installing home security systems like CCTVs, motion detectors, and security alarms not only protect your home from burglaries and thefts but also help lower the cost of your insurance.
   
• Riders
  Additional riders have a significant impact on your home insurance premiums. They are not included in your home insurance policy; you need to add them separately and pay extra for each rider. You have the option to purchase these riders when you buy or renew your home insurance policy. You have a wide selection of add-on riders to choose from, allowing you to get comprehensive coverage for your home.

Things To Know Before Buying Home Insurance

Make sure you keep these aspects in mind before you go about purchasing home insurance -

• Proper research
  When it comes to home insurance, there are different plans that offer varying levels of protection. It's important for you to research and understand these differences so you can choose the policy that best suits your home and belongings.
   
• Assess current market value
  Before you buy home insurance, make sure to assess the current market value of your home and the cost of rebuilding or replacing it if something unfortunate happens. It's important to choose a coverage amount that reflects these evaluations, so you have enough protection. Keep in mind that the replacement cost is different from the market value.
   
• Find your unique plan
  The home insurance plan your friends or neighbours choose may not be suited for you. Everyone has different preferences, so what works for you might not work for someone else. Your home insurance policy should meet your specific needs and lifestyle. To determine if the policy is right for you, ask yourself basic questions like: Does the home insurance plan provide the coverage you need? Does it cover the contents of your home too? And more.
   
• Understand your policy
  Knowing what your policy covers is just as important as understanding what it doesn't. Standard home insurance usually protects against damage or loss from things like fire, theft, vandalism, windstorms, and liability claims. However, different policies may have varying scopes of coverage, so be sure to carefully review the coverage sections of your policy. A home insurance policy may not cover everything. You should review the policy exclusions and limitations carefully.
   
• Understand deductibles
  When it comes to home insurance, the deductible is the amount you have to pay before your policy’s coverage kicks in. Opting for a higher deductible can bring down your premium, but keep in mind that you'll have to shell out more if you need to make a claim. Take into account your financial situation and how much risk you're comfortable with when deciding on your deductible.
   
• Make an inventory of your belongings
  It is essential for you to create a comprehensive inventory of your personal belongings. This list should cover everything, including furniture, electronics, jewellery, artwork, valuable collectables, etc. Having a record of your possessions will assist you in determining the appropriate level of coverage you require.
   
• Knowing add-ons
  By adding extra add-ons to your base home insurance plan, you can enhance its coverage and tailor it to your specific requirements, ensuring the security of your home. It's important to note that the available add-ons may differ between insurance providers.
   
• Make honest and right disclosures
  When you're buying home insurance, make sure to give accurate information about your property and its contents. This includes details like the the total area of the house, information about any jewellery or valuables, etc. Providing correct information helps the home insurance company determine the right coverage for you. If any information is found to be incorrect or false, it may result in denied claims.

Home Insurance Policy Buying Process

Let’s understand the process to buying a home insurance policy -

1. To understand the policy options, benefits, and coverage offered, consult with an insurance expert or contact an insurance company directly. This step is crucial in helping you make informed decisions about your home insurance needs.
    
2. Once you have chosen a home insurance policy, make sure to fill out the proposal form with all the necessary information. This form is vital when applying for home insurance as it gathers important details about your property's value and your personal information. Make sure you fill out the form correctly and include all necessary details. Any mistakes or missing information could impact your coverage or future claims, so review the form before submitting it.
    
3. When submitting the proposal form, remember to include any additional documents that may be required. These could be certificates, proof of ownership, or any other documents requested by the insurance company. It's important to submit all necessary documents promptly to avoid any delays in processing your application.
    
4. To begin your home insurance coverage, you'll need to pay the premium. Keep in mind that the payment process may vary among different insurers.
    
5. Once you receive your home insurance policy, you will get your policy documents. These documents give you a detailed overview of your coverage, terms, and conditions. Take the time to review them carefully so you can understand your rights, responsibilities, and the extent of your coverage.

Making A Home Insurance Claim

When any physical loss or damage happens to your home building or contents because of an insured event, you will need to make a claim. Here’s how -

1. Promptly notify your insurer of the loss or damage. This is an important step for the insurer to assess and investigate the loss or damage.
    
2. Provide all the necessary information, such as:

• Your name
• Your contact details
• Policy number
• Date and time of loss
• Location of loss
• Details and a brief statement of the insured event and the loss you’ve incurred.

3. Provide the insurer with the following documents -

• Filled out and signed claim form, providing all the necessary information about the loss or damage that occurred. Include an estimate of the amount you are claiming, along with any supporting documents required by the company.
• Fire Brigade Report in case of a fire.
• Police First Information Report and Final Investigation Report for theft and burglary claims.
• Bills, invoices, and valuation reports to support and substantiate the claim amount.
• NEFT details and a cancelled cheque.
• Any other necessary documents to establish the loss or its quantum.

4. When you provide all the necessary information and the claim form, the insurance company will assign a surveyor to assess the loss within 72 hours of receiving your notification.
    
5. You should allow the surveyor to inspect your lost or damaged properties or goods, and provide assistance rather than obstructing or preventing them from performing their duties. You must not abandon the insured property/items in the premises, or attempt to fix the damage without approval from the insurance company or surveyor.
    
6. The surveyor will submit their report to the insurance company within 30 days of being appointed. If the insurance company receives an incomplete survey report, they may ask the surveyor to provide an additional report on specific issues they require within 15 days of receiving the original report. When the surveyor receives this communication, they will provide an additional report within 3 weeks.
    
7. Once the insurance company receives the survey report or additional survey report, they will offer a claim settlement to you within 30 days. Once you accept the same, the payment will be made within 7 days.
    
8. If your insurance company decides to reject your claim, they must do so within 30 days of receiving the survey report or additional survey report. You can file grievances under the Grievance Redressal Procedure if needed.

Keep This In Mind!

Here are some extra bits of information you should know about -

1️⃣Steps to Prevent Damage
To prevent any further loss or damage to your home building and contents, it is important that you take all reasonable steps.

2️⃣Things You Shouldn’t Do
Till the insurer has inspected your property and given their consent, refrain from doing the following -

• Selling or disposing of any damaged items from the property.
• Washing, cleaning, or removing damaged items/debris (except if absolutely necessary)
• Any repair work, unless it is urgent and you are unable to contact the insurer.

3️⃣Immediate Notice to Authorities
If your insured property is damaged or lost, make sure to report the incident to the relevant legal authorities. For instance -

• Report any fire, explosion, implosion, or lightning damage to the fire brigade and local police.
• Inform the District Administration about subsidence, landslide, or rockslide incidents.
• Notify the police of any impact damage, riot strikes, malicious damages, or acts of terrorism.
• In case of theft, make sure to inform the police within seven days.

4️⃣Establish Loss
You need to provide proof that the insured event happened and describe the extent of the physical loss or damage in great detail. When the insurer asks, you need to provide evidence to support your claim for home building and/or home contents. This includes vouchers, invoices, etc. related to the costs you incurred for reconstruction, replacement, or repairs. You must also allow the insurer, their officers, surveyors, or representatives to inspect the damage to your property and collect relevant information such as measurements, samples, damaged items or parts, and photographs.

FAQs

1. What is home insurance? Why do I need it?
   Home insurance is a valuable policy that shields your home and personal possessions from unforeseen occurrences such as fires, theft, and natural disasters. It is crucial as it safeguards one of your largest investment and offers reassurance in the face of unexpected events.
    
2. What factors decide your home insurance premiums?
   The premium is calculated considering several factors, such as where your home is situated, its value, deductible, the level of coverage you opt for, and other relevant aspects.
    
3. What is excluded in a home insurance policy?
   Some common things that may not be covered by a home insurance policy are damage caused by the intentional burning of insured property by a public authority, damage resulting from the normal cracking or bedding down of new structures, damage caused by the settling or movement of man-made ground, damage because of erosion from coastal areas or rivers, and more.
    
4. Is it possible for me to opt for a deductible in order to reduce the premium on my home insurance policy?
   Certainly, it is possible to choose a higher deductible. By opting for this, you can reduce your premium. However, it's important to consider that in the event of a claim, you will be responsible for paying more out of your own pocket.
    
5. What steps should I take following a loss or damage to my home?
   Following any damage or loss to your home, it is essential to promptly inform your insurance company, capture the loss/damage through photographs, and take necessary measures to prevent any additional harm. It is important not to discard any damaged items until they have been inspected by your insurer.
    

What’s the procedure for making a claim under my home insurance policy?

If you experience a covered damage or loss to your home, reach out to your insurer to begin the claims process. You will be required to fill out a claim form, submit relevant documents, and collaborate with any necessary investigations. Your insurer will carefully evaluate the extent of the damage