Have you insured your home yet?

It is quite common to take life insurance policies to protect the future of your loved ones. However, have you insured your home against any unseen calamities? If not, it is time you understood home insurance policies.

For most of us, owning a home is the biggest dream of our lives. For those who are successful in accomplishing this dream, their homes are the most precious possession of their lives. They would do anything to ensure the safety of their homes. Unfortunately, life is unpredictable. There are innumerable accidents that could threaten the safety of your home. Add to that the natural calamities which have become more frequent over the years. In such a scenario, home insurance emerges as a necessity to protect your home from threats.

Gagan Anand, Country Manager, Torus Business Solutions Pvt Ltd emphasises on the need for an insurance policy for homes to mitigate the associated risks. “Home insurance is not very expensive considering how much we spend on setting up our homes”, says Anand. He further tells us that while home insurance usually does not cost much in most areas, some calamity-prone zones might have higher premiums due to their history.

Home insurance, also called homeowners’ insurance, is basically of two types:

• Policy covering the building structure
• Policy covering the contents of the home

Insurance policy of the building usually covers the structure of the building and the permanent fixtures and fittings against damage arising from fire, explosions, storms, lightning, floods and bursting or leakage of water tanks and pipes. Home insurance policies can also cover damage caused to the structure due to earthquakes, landslides, acts of terrorism, riots as well as impact by vehicles and airplanes. However, some of these would require additional cover.

Insurance policy for the contents of the home usually includes damage to or theft of electrical and electronic goods, furniture, furnishings, jewellery and other precious artefacts. Such a policy usually covers the contents on their market value. This means the claim would be paid at the value of a similar item in the market minus depreciation, and not at the price at which the item was originally bought. In case of a policy for the building structure, only the cost of constructing the building would be considered and not the market value of the building. This is because price of a property includes both the value of land as well as the cost of construction but land cannot be insured.

Exclusions from home insurance cover

Home insurance does not usually include the following:

• Wilful destruction of property
• Damage caused by normal wear and tear
• Damage caused by war or invasion
• Loss of money in the form of cash
• House that remains unoccupied for a stretch of time

There is a popular misconception among the public that only homeowners need to insure their homes. Tenants may also get a home insurance policy covering the contents of the rented house. According to Gagan Anand, home insurance is not as popular in the country as other kinds of insurance, primarily due to less visibility and seriousness among the public. There is a need for creating more awareness in order to sensitise people about home insurance and its importance. After all, there’s no place like home. 

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