Why You Should Insure Your Home
Recently, houses in Chennai got damaged during incessant rains. Many houses in parts of India and Nepal were reduced to rubble in the wake of an earthquake. Even though the prospect of such disasters happening to you are exceptionally low, you should be prepared for such unlikely events.
This is where home insurances comes into play.
Your home is probably your most valuable asset and insurance helps you protect it from unexpected events such as fire, natural disasters, burglary, etc. There are also policies that ensure security for everything that is in your home, including furniture and fixtures.
You can also insure your home loan, and this is equally as important.
Insuring your home loan amount
In case you are not able to repay your home loan because of circumstances beyond your control, your insurance company will pay your home loan, if you have it insured. However, when you apply for loan insurance, you should have a clear idea of the premium you are expected to pay, the extent of coverage, the contexts in which the company will pay you, and the probability of such a disaster happening.
For example, the home loan insurance policy of ICICI Bank has a constant life cover for the entire tenure of your loan. The tenure period is also flexible, and up to 20 years. The bank's policy also covers all the loan co-applicants and offers them tax benefits according to the norms stipulated by the government.
Insuring your home
There are insurance policies that pay to rebuild the structure of your home. When the insurance companies pay for damages to the structure of your home, it pays you the construction cost involved in rebuilding your home. But, different policies demand different premium rates. For example, you may have to pay an extra premium for policies that cover the cost of rebuilding your home when a landslide, terrorist attack or earthquake happen.
Insurance policies may even pay the cost incurred to outsiders when something happens to your property.
Generally, the premium you need to pay to insure your home is often low. The extent to which insurance companies pay for damages would depend on the event, the insurance company, the premium you pay and the nature of the insurance policy.
However, when you insure your home, you should declare the value of your possessions within your home. When a natural disaster or a fire of anything of this nature happens, the insurance company estimates the value of your lost possessions, including the structure of your home. But, to claim those benefits, you must make sure that you do not do anything illegal, like illegally constructing your house. You should also maintain bills of everything you own and ensuring your home is in a good condition. If you are a tenant, the insurance company will pay you for only the damages that happens to the goods in your home.