Home is where the hearth is, as rightly said. A major portion of investment in a person's life is targeted at home. Availing the best home insurance policy therefore ensures that this investment is secured against natural calamities like tornado earthquake or any other unfortunate event like theft, fire etc. Equipping oneself with a right home insurance policy the homeowners or policyholders can remain prepared to face any consequences that may come in their way in the event of a natural calamity.
Insurance companies provide various home insurance policies to protect homes from both natural and manmade calamities, which may come in the form of burglaries, theft, fire or earthquake. On additional payment, some insurers also offer coverage against terrorism.
Insurance companies provide customers with instant quotes, the premiums for which are calculated keeping a number of factors in mind. They generally consider the area of the house by measuring it per square feet, the location of the property and an estimate of the rate of construction or the expense incurred per square feet.
In India, a property that is over 50 years old is not insured. Companies further insure only the concrete structures (RCC) and brick houses and not the thatched houses. Upon a house passing such criteria, its owner is required to pay the insurance premium on a monthly, quarterly or half-yearly basis according to sum insured.
As different customers have different needs, insurance companies also offer different home insurance policies to meet the requirements. Some policies have a standard or fixed coverage, while others are flexible packages, which could be a basket of covers. The premium for the latter is higher compared to the standard cover because the risk of the company that provides such covers is more. Some insurers also offer huge discount on premium, if you insure you home for a long-term say 30-35 years.
Two ways of selecting a cover
- Willful destruction of property
- Cash, bullion, painting, works of art and antiques
There are two ways of choosing a cover—Market value less depreciation and its reinstatement or reconstruction value. For instance, if the building has 50 years of life, it will mean a depreciation of 2% every year. So if insurance policy is taken in 10th year on market value basis, then 20% will be deducted from reconstruction cost of property to arrive at the market value of the building which will be sum insured under the policy.
Reinstatement cover means that the insurer will cover the cost of reinstating the damaged portion of your house. Always remember, choosing more covers give you a discount on premiums.
You need to adequately insure the house else the insurer will penalise you. So if the cost of construction of your house is Rs. 1 crore and you take a cover of say Rs. 50 lakh, under insurance by 50%, and make a claim of say Rs. 10 lakh, the insurer will only pay you Rs. 5 lakh
You can also buy home insurance online. These days many insurers offers home insurance plans online. Buying a home insurance policy online is usually safe and more cost-effective since companies pass on the savings from distribution, administration and courier expenses to the customer. One can purchase the home insurance plan 24x7, 365 days a year. You can compare various home insurance policies, and choose one that best suits your needs. One can choose from a wide range of options to pay online. These include credit/debit card payment, net banking, funds transfer.
Read the fine print
While buying an online home insurance plan, you need to read the fine print carefully. Make an analysis of what is covered and what is not covered under the policy.
Ensure that you read the terms & conditions of the policy thoroughly. In case of any doubt, don’t hesitate to seek the help of customer care executives through online chat / 24x7 toll-free calling facility.
While most insurers have put in strong security systems in place, it is important to reconfirm the same before transacting online. One should ensure that the address line of the browser page reads ‘https’ instead of the regular ‘http’, since the same indicates secured connection. Finally, ensure that all your online policy documents are safely maintained.
Claiming a home insurance policy
An individual can forward a claim to the insuring company in the event of burglary, theft or fire. Leading insurers have also launched 24-hour help lines and call centers to speed up the claim process and provide better service to customers. When an individual makes a claim request, he will have to provide all his personal details, details of the property as well as the details of the policy purchased. The insurance company then assigns a surveyor who submits the loss report following an inspection of the property. A claim is usually processed by the company within seven to 15 days. Once the claim receives the company’s approval, the insured is intimated in writing about the approval after which the company issues the stipulated payment via check.