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Beginners Guide to Home Insurance

A home is much more than just bricks or concrete. It is built with love, care and a lot of hope. A homeowner usually focuses on the structure, design, and decor of the house. However, you might forget to secure your home against natural calamities and unanticipated disasters like theft, earthquakes, tornadoes or cyclones. We need to plan for such contingencies as well while purchasing a house. Many people might think that having a home insurance policy is just a mere luxury. However, they are wrong if they think so. More than a luxury, home insurance is a necessity as it gives you protection against the above-mentioned contingencies. Plus, you won’t be burdened with countless expenses if your home has to be rebuilt or repaired after a disaster.

Home insurance is the key to finding a comprehensive cover for all these issues – foreseeable and unforeseeable. In other words, it is a kind of property insurance. Most people are however generally unaware of the details of such insurance policies. So, read on to know more.

What is Home Insurance?

Home insurance covers external as well as internal damage to homes. It serves multiple purposes, ranging from property insurance to liability coverage and includes premium payment for risks. The cost of home insurance depends on the cost to rebuild the house. The price is estimated on the basis of location, coverage and the insurance amount that is based on the estimated cost to rebuild the home.

Things to keep in mind while choosing a home insurance

  • The first step is risk evaluation. For instance, if you reside in an earthquake-prone area then you should ensure that your Home Insurance Policy covers this risk. Apart from this, while checking coverage, one should keep the track of the premium that suits your budget. One can compare the insurance policies of different companies before making a choice.
  • You need to choose the sum assured wisely. It’s better not to compromise on the sum assured simply because you want to save on the premium amount.
  • Goodwill of the insurance company also depends on its claim settlement time. Before buying home insurance it is quite necessary for the homeowner to check the claim settlement record of the insurance company. Always look for the insurance company whose claim settlement is hassle-free and seamless. One would not want to wait too long for the reimbursement from the insurance company and put his family through difficult times. A fast and speedy claims process gives immense relief to the policyholder
  • Apart from the above points, one must also seek necessary details of the insurance company, such as how to reach customer service to resolve your queries. It is necessary to choose from the best companies available, and points that must be considered are terms of maturity, monthly premium to be paid, what all damages you can claim, and how well-equipped is the staff to assist you.
  • Further, select a policy that considers all the scenarios. Purchase a policy that covers all the outcomes you might be subjected to.
  • If you have already taken out one insurance policy, you can upgrade the policy as per your needs.
  • Always remember to go through all the terms and conditions of the policy, such as considering what the conditions are in case of lapse of the policy.

Inclusions in Home Insurance

Home insurance plans cover all sorts of losses that your home might be subject to whether due to natural or non-natural calamities.

  • Fire and Perils Cover:

It includes damage caused to home due to fire, lighting, riot, strike, cyclone, flood, hurricanes and so on.

  • Earthquake Cover:

This policy will cover loss to any insured property due to an earthquake. However, there might be many policies that do not cover earthquake generated calamities such as overflow of sea or flood or hailstorm. One can go for the riders for protection against an earthquake as few companies do not provide protection against earthquake in their base cover.

  • Burglary Cover:

Under this policy, the content of homes is covered against theft or burglary. The policy covers gold and silver jewelry and other valuable items.

Claim Process

Once you avail a home insurance policy, you can claim it whenever the requirement occurs. Every insurance company has a deadline or turn-around time (TAT) within which you need to inform them about your loss. Before claiming the insurance, you need to lodge the FIR, and its copy is to be submitted to the insurance company. Apart from this, there are some more documents that you need to present before the insurance company while claiming, like:

  • Fire brigade report (in case of fire breakout)
  • Medical Officer’s certificate if any death or disability occurs
  • Police investigation report
  • Repair estimates

It is wise to choose an insurance company which provides

Moreover, while ensuring your home. You are required to pay a premium for the risk. You can read the policy terms and then decide on the premium amount as per your budget. You can lower your premium amount if you agree to share the burden of house repair. Further, taking two or more insurance covers makes you eligible for a discount. Therefore, it’s not really tough to get home insurance, as long as you know how to go about it.

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