Things to Keep in Mind When Applying for a Home Insurance

In an ideal world, everyone would be safe and protected from natural calamities. However, in reality, disasters like floods and fire do take place and cause damage to both life and property.
While you can’t avoid these from occurring in the first place, you can at least invest in a good home insurance scheme to minimize the financial damage. That said, there are a few things you need to know before you apply for one:

Different Types of Home Insurance

A home insurance can be broadly classified into 2 categories:

• Fire Insurance Policy (standard)
• Comprehensive aka Householder’s Package Policy (HPP)

The first one is the basic home insurance policy which covers fire damage. However, the second one, as the name suggests, covers a variety of hazards such as floods, lightning, and even burglary. Naturally, the former is the cheapest but comes at a lower level of protection.

Insurance Coverage Offered

The coverage amount is based on the building cost and not the property value. For instance, if the market value of your house is Rs. 70 lakhs, but the building cost i.e. the cost of the construction is Rs. 40 lakhs, then you the sum insured will be only Rs. 40 lakhs.

Standard Charges

For an insurance cover of Rs. 30 lakh along with Rs. 5 lakh worth of cover for the contents of the house, the customer will need to pay around Rs. 2,000 a year. If you add other types of protection such as burglary then the premium can increase up to Rs. 3,000 per year.

Claim Process

When a customer raises an insurance claim then they have to specify the details of the damage. An inspector then visits the house to verify the claims. So, it’s important that you are careful with the information you provide. If there is any discrepancy, then the insurer can reject the claim. They can also reject the same if there is an unauthorized construction in the house that led to the damage.

Image Source