The images of the recent floods in Kerala are still fresh in our memory. Thousands of houses and crores worth of property were washed away in a flash. It’s estimated that state-owned insurance companies have received almost 11,000 claims worth Rs 1,200 Crore.
While other forms of insurance like vehicle insurance and life insurance are common, home insurance is not very popular. Yet, the homes we own end up being the most valuable asset in our lives! But somehow, home insurance in India is yet to take off. The loss of your home can be too big a financial burden, and we caught up with our legal expert to delve into all the finer details of having a home insurance policy.
What is a home insurance policy and what does it cover?
A home insurance policy will cover any loss to your property caused by fire, natural disasters, burglary or terrorism. There are two components to a home insurance cover: The first part covers the cost of reconstruction of the home, and the other covers the contents of the home.
The reconstruction cover provides for the cost of reconstructing the home. The cost of construction is taken into account here, and not the market value of the property. Your home insurance policy only covers the structure of your property and does not include the land on which it is built.
The contents part of the insurance covers provides for the replacement cost of the contents of the home like the TV, refrigerator, wardrobes and fittings, and jewellery (if included for). Specific policies also provide for alternative accommodation cost incurred while your home is being reconstructed.
The reconstruction/structure cover and the contents cover can be either combined or can also be availed separately. If you are staying in rented accommodation, then it would make sense for you to cover just the contents of the home.
Does a home insurance policy cover damages due to any possible eventuality?
Your house could be damaged due to a hundred different reasons, but sadly there are no home insurance policies that cover all possible damages. There are a few exclusions like damages caused due to war, invasion, volcanoes, radioactive activity or any burglary or theft involving a family member.
Some pointers to keep in mind while choosing a home insurance cover
- Keep all payment receipts for the contents of your house, which might be later required
- It is good to get an estimate of the cost of construction by a civil engineer/contractor each year when you renew your insurance.
- Just as you renew other insurances, the timely renewal of your home insurance is very important
- Make sure there is no unauthorised construction on your property, which might lead to a rejection of your claim
- Compare the premium vis-à-vis the coverage and exclusions
With that in mind, let’s explore the top three popular insurance policies in India:
New India Assurance Griha Suvidha
Offered by the government-backed New India Assurance company, Griha Suvidha policy is one of the simplest and easiest to understand policies in the market. Unlike most policies, there is no insistence on the proof of ownership or receipt of payment needed for claim settlement.
The process of claim settlement seems to be relatively quick because claims below Rs 20,000 are cleared automatically, and claims above that limit are cleared after an inspection.
HDFC Ergo Home Insurance
HDFC Ergo is a joint venture between HDFC Limited and ERGO International.
HDFC ERGO’s home insurance policy gives coverage of up to five years at a time with an option to increase the cover by 10% each year. Additional discounts on the premium are allowed for individuals who install security systems at their homes. The claims can be registered over their toll-free number, and the claim settlement appears to be quick and easy.
Bharati AXA Home Insurance
Bharti AXA’s Smart Plan Householder’s Package Policy is a comprehensive coverage plan that provides cover for both the property and its contents. In addition, the policyholder, spouse, and two dependent children under the age of 23 are also insured against any fatal accidents or accidents causing disability.
Did you know you could also obtain cover for up to three pedigree pets under this cover? The claim process is simple. You are required to intimate the company over phone or email as soon as the necessity for a claim arises.
There you have it – our list of the top three home insurance policies.
Your home is an invaluable asset that holds many memories of your loved ones. Secure it with home insurance and earn your peace of mind.