Every year we make sure to renew our vehicle and health insurance. But we often tend to ignore one of the most critical insurances- property insurance. A recent survey by a leading insurance company brought forth certain shocking revelations. As per the survey, nearly 93% of respondents did not have property insurance. What was more surprising was the fact that out of the total respondents, 62% were aware of the benefits of an insurance policy. One of the primary reasons cited was the cost factor.
“The magical thing about home is that it feels good to leave, and it feels even better to come back.” These lines by Wendy Wunder holds true for all us. People who have suffered earthquakes, flash floods, massive fires, or landslides are real evidence of how your home can be destroyed or damaged in just a few seconds. The impact of natural disasters can be reduced to some extent if you have property insurance.
So, what does a basic property insurance policy covers? Well, it usually has two parts-one that covers the structure and other that includes the household valuables such as electronic appliances and furniture. Also, depending on the insurance, one can get cover for fire and allied perils, including lightning, storm and flood, and earthquake. One can also get insured against burglary, damage, and mechanical or electrical breakdown.
Now, let’s get to the FAQs
What are the different types of property insurance policies?
- Standard Fire & Allied Perils Policies: This covers most of the perils the property is exposed to like fire, riots, flood, and storm.
- Burglary & House Breaking Insurance Policy: This includes the loss of current assets due to burglary or theft.
- All Risks Policy: All valuables can be covered under this.
What will be the cost of a fire insurance policy?
The cost of a fire insurance policy depends on several factors. These include:
- Perils to be covered
- The value of the items covered
- The usage of the premises proposed for insurance
- The location details of the premises proposed for insurance
I need to cover my jewellery. What policy should I take?
You can take All Risks Policy for covering jewellery. You must ensure that your jewellery is valued rightly.
Can tenants take property insurance?
Yes. But since it is a rented property, one can get the contents (valuables) insured and not the structure. And in case, you plan to shift your rented home; you can get the address change in the policy for it to become relevant for your new abode.
Some points to remember
Here are a few points to remember while opting for an insurance policy.
- One of the most common myths is that low premium equals small insurance cover. However, the cost of a premium can be reduced if you select a property insurance policy that suits your needs well. Thus, before finalising on one, do compare plans offered by different companies. It will also give you a holistic picture of what is available in the market.
- Do not buy unnecessary add-ons. For instance, if you are staying in a peaceful area, in all the probability, terrorism cover may not be useful for you.
- Insurance policy can generally be taken for a minimum of one year to a maximum of five years. Make sure to renew your policy once it expires.
- Read the terms and conditions of the policy carefully.