Home Insurance – Why Should You Buy it?

Home insurance is the type of insurance which provides cover against the loss of house structure or its contents. It is sort of property insurance to safe guard against any unforeseen loss or damage to the property. The unforeseen event could be anything ranging from flood, storm, landslides, burglary, riots, theft etc. In this article, we will check what home insurance policy covers and why one should buy it. It is must have insurance policy after the term insurance policy.

Roti, Kapda, aur Makaan

Protecting the bare necessities of life is a duty

What is covered under home insurance policy

The property insurance policy covers most of the unforeseen events like:

  • Damage due to flood, storm, landslide like natural calamities
  • Lightening
  • Explosion & Implosion
  • Air craft damage
  • Impact damage
  • Bursting and/ or overflowing of Water Tanks, Apparatus and Pipes
  • Missile Testing Operations
  • Leakage from Automatic Sprinkler Installations
  • Bush fire
  • Burglary & theft
  • Riots

Some of the policy also cover the repair or replacement cost of electrical equipments at extra premium. Basically, there are two types of policy available in the market.

  1. Covers the house insurance
  2. Covers house and its contents

It is advisable to go for comprehensive home insurance policy which covers not only the house but also covers its contents. The premium charges for comprehensive policy is not that high as compared to the normal policy.

What are the benefits of Property Insurance Policy?

Here are the benefits of the house insurance policy and why one should have it.

  • It covers both house and its content against the loss due to any unforeseen event
  • Secure your asset which you have build with lot of efforts and emotions
  • The premium is usually lower as compared to other insurance policies
  • Have a peace of mind in case of any unforeseen event
  • Compensation for re-building the house
  • Compensation for rent
  • The claim settlement process id quite easy and hassle-free

What is not covered under the house insurance propety?

These are the items you must check before purchasing the house insurance policy. Usually, the agent or the company will not tell you these things at the time of pitching the product. Hence, I thought I must bring this to light so that you can take informed decision on your home insurance policy.

  • Consequential loss of any kind or description
  • Loss of cash
  • Seepage losses
  • Self damage to property
  • Government impact
  • Pre-existing damage
  • Home business
  • War
  • Damage caused due to pollution
  • Mechanical/electrical breakdown
  • Loss or damage caused by depreciation or wear and tear
  • Damage to contents of a consumable nature
  • Loss or damage to mobile phones or similar communication devices
  • Loss of or damage to valuables, jewelry or precious items
  • Other exclusions as listed in the policy wordings

What all thing you should look for in home insurance policy?

Make sure that you must check all the below points before making your purchase decision. These are the bare minimum checklist you must go through in order to get the best policy which suits your needs.

Policy premium and its coverage

For any insurance policy, you must check policy wording to confirm its applicability and coverage. The main thing you must check is the policy coverage. It means the event it is covering under the policy. It must cover all the major events like fire, flood, lightening, theft, earthquake etc. these are the main events that must have been covered under the policy.

You should also compare the policy premium with other available policy. Choose the best one which is fulfilling your needs and comes in your budget as well.

Claim settlement ratio

The measurement of the good insurance company is its claim settlement ratio. This ratio shows how the insurance company is responding to the customer’s claim and what is the turn around time. Better the score, better is the insurance company. You should not look anything below 95% of the claim settlement ratio. There are companies with claim settlement ratio of 98% +.

Also, you should go for the company who has good customer service score and less TAT. These are the major differentiator among good and best company. Imaging the day when you have to claim for your house insurance policy and there is no one to guide you on to how to initiate a claim process and what all documents are required to fill in the application form.

Factors affecting home insurance policy rate

Believe it or not the area where your house is located makes a huge difference when it comes to calculating home insurance policy premium. You won’t believe but below are the points affecting the property insurance premium rate.

  • Availability of the building material
  • Crime rate of the area
  • History of previous claims
  • Coverage options you have selected
  • Age of your house
  • Neighborhood

Best Home Insurance Policy

Now that you have a fair idea about what is home insurance and why it is necessary, let’s check and compare the property insurance policy available in the market.

ParticularBajaj AllianzSBI GeneralUnited India
Sum Assured50L50L50L
Policy Premium138/Month110/Month113/Month
Loss of RentYesNoNo
Personal Accident CoverYesNoNo
Rent for Alternate AccommodationYesYesYes
Bush fire, Forest fire, Jungle fireNoYesYes

Looking at the above comparison table, I would recommend to go for Bajaj Allianz home insurance policy for best features and value for money.

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