Safeguard Your Home With The Right Home Insurance

Safeguard Your Home With The Right Home Insurance

Safeguard Your Home With The Right Home Insurance
Year after year, your property might undergo a depreciation in value owing to slow structural decay. You cannot claim losses for this under a property insurance policy. (Dreamstime)

Home buying, as we all know, is a decision of a lifetime. We carefully study all the options available, and double check on the paperwork before buying any property. It costs a lot of money and effort, then why shortchange its insurance cover? Devote as much time and effort to planning the insurance cover for your house as you do to buying it. When compared to general insurance plans, a home insurance plan comes with an option to insure the house for a longer period, up to a maximum of three years. In addition, the home insurance cover does not come with any waiting periods, making it a quick process for home buyers. 

Generally, home insurance covers are different for different property types. Apart from self-owned properties, one can also take a home insurance cover for rented accommodations, too.

Let's look how these insurance plans are different from each other:

Home insurance plans for independent homes

Depending upon the structure and contents of the house, the owner can look at the insurance plans that can cover these items. The dweller has an option to either select a cover for the structure on reinstatement or indemnity basis. But what is reinstatement and indemnity?

If the owner selects to insure the house on reinstatement basis, then at the time of claim, the insurer will offer the present construction cost of the house, apart from the land value. In case the resident chooses for an indemnity cover, depending on the age of the building, the insurer will take into consideration depreciation of the building construction cost and then decide on the claim amount to be paid. This cover is not favourable for owners or buyers of an independent house. Reinstatement cover is the best option such home buyers. The resident can also insure other items of the house including jewellery and other transferable products. With opting for an all risk policy that offers a cover against a range of perils such as fire and related dangers, robbery, theft, natural calamities, riots and other spiteful damage to the house.

Likewise, the home insurance policy comes with features like get 'new for old'. Under this a dented house item can be replaced by new one of the same kind and capacity. On a reinstatement home insurance cover the annual premium will be around Rs 6,300 for a cover of Rs 50 lakh for the house and Rs 5 lakh for its items. 

Home insurance plan for apartment owners

For an apartment owner, checking on the home insurance covers on an agreed value basis becomes mandatory. A new owner can insure their apartment for an amount that takes into consideration the value of the property as per the sale deed. And those who already possess an apartment can insure their flat on a cover amount based on the valuation report acknowledged by the local authorities. This kind of home insurance cover is important for builder-constructed floors that have multi-storeyed flats, where owners do not have the whole ownership of the property. 

In these kind of policies, the insurer offers compensation that would allow you to buy another apartment in a similar locality. The annual premium will not cost more than Rs 9,000 for an apartment worth Rs 1 crore with contents worth Rs 5 lakh.

Home insurance plan for tenants

There are several myths surrounded by fact that tenants don't need a home insurance. Many people believe that living on a rented accommodation means you are not owning the property and that makes you not entitled of availing a home insurance cover. Tenants can also buy a cover for the contents of their rented apartment or house, including portable equipment and valuables. An all-risk policy is the better option for a tenant on their belongings, which would cost around Rs 4,000 annually for a Rs 5-lakh cover.

Last Updated: Fri Mar 03 2017

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