What great pleasure lies in the often repeated statement, ‘I am home’. A home is a place of rest, sanctuary and the word itself signals peace and finality. A house also entails a tremendous expenditure of money, emotions and time- a onetime investment in many of our lives. Thus, securing this symbol of independence and achievement, against natural calamities and man-made conditions, is an extremely important concern. Ergo, the need for a good, comprehensive and timely Home Insurance Policy.
In India, Home or Property Insurance is a popular banking product. Being secure is better than being sorry- the essential tenet behind the concept of insurance, applies particularly to an emotional and costly insurance such as your family home. Aside from the structure itself, a good home insurance policy provides protection to the items/ implements/ appliances and prized possessions included in the home. A trusty home insurance policy is not just the protector of your cherished home, but the precious and unique memories and emotions that reside therein.
Features and Benefits of Home Insurance:
Subscribing to a comprehensive home insurance policy allows you to enjoy the features and benefits, following
- Complete coverage against financial liabilities arising from the damage/loss of your home and/or its contents due to natural or man-made reasons.
- Thoughtful additional covers including Burglary and Theft Cover, Earthquake Cover, etc. for specialized protection.
- 100% mental peace when there is a solid security to fall back on, especially in these times of social strife and environmental upheavals.
- Applying for a home insurance policy is simple, the turnaround times are quick and almost all banks in India offer this very dynamic product.
- After the calamity that resulted in the damage/loss of your home, the on-time home insurance payouts will massively assist in helping the family put their lives back together. A big relief in such a trying time.
Read more about Most Important Features of a Home Insurance Policy
Eligibility for Home Insurance:
There are certain criteria that you must fulfil in order to obtain a home insurance. This varies widely from company to company. However, most companies have minimal requirements when it comes to home insurance. They are:
- Home Insurance Policy can be bought by individuals or by companies. Individuals who are Indian residents and the owner / occupant of a property can get a Home Insurance Policy. Home Insurance - multi year policy, however, can be purchased only by the owner of the house/flat.
- To buy Home insurance for a society, any authorized member of the particular society’s managing committee can make the purchase. The policy will be issued in the name of the society and will cover the society building as well as the utilities that are for common use in the society.
- It’s not just owners who can get home insurance. Many insurance companies provide cover for contents to tenants as well. Contents insurance will cover your possessions against loss or damage by lightning, fire, theft, smoke, flood etc. Everything from personal belongings, furniture and electrical items including washing machines, dryers etc. can be covered. You must read the fine print carefully before buying cover as a tenant. What is covered will vary from company to company. For example, certain insurers will not cover contents if you live in a shared accommodation. There are many such exceptions that you must look out for.
Home Insurance Claim Process:
Given the times we live in, one cannot be entirely safe at home or even outside. The same risk extends to our prized belongings too, like our house or vehicles. So, while vehicles are protected by a , our house also requires similar protection, which can be provided by a home insurance policy. One of the most crucial elements of a home insurance policy is the claim settlement process. A smooth claim settlement process can easily make or break a home insurance policy. The process of claim settlement is very crucial to a home insurance policy and it is important for every home insurance policy owner to familiarize themselves with the basics of the process. So, here are a few handy pointers to remember when you have to make an insurance claim.
- First and foremost, evaluate the damage that the house has sustained. Even if there has not been any major damage, it is important to get an estimate.
- If the house has been burgled or there has been a theft, the immediate step must be to contact the place to file an FIR, and also contact your insurance provider.
- One of the more important things to do, in a situation where the house has sustained damage is to record the same via photographs. Take photos of the house or your could record the same on video by walking through every part of the house. Also, do not toss away the items inside the house which may have been damaged. All his is necessary in order for you to substantiate your claim.
- When assessing the damage caused, you must take all the costs into consideration like the cost of labor, materials and even the items inside the house which have been lost or damaged. Also, add any cost that you might incur on alternate living arrangements while your house is under repair.
- It is important that you contact your insurance provider before taking any action.
- Find out the time limit that your home insurance policy carries regarding the filing of claims. Usually, companies have a time limit within which you must file for a claim.
- You must ensure that no further damage is caused to the house. Also, make sure you save all receipts on whatever expenses you do incur and submit the same to the insurance provider.
- Once you have notified the insurance company about the damage, you will be required to fill up the claim form. Ensure that you do not miss out any details and also provide correct information. Also, given that insurance policies are often time bound when it comes to filing of claims, try sending the filled out form at the earliest so the claim process can be initiated.
Following this, once the company has received your Claim Form, the insurance company will send a Surveyor or Adjustor to inspect the damage that the house has undergone. Though the insurance company is very unlikely to disapprove of your claim, the surveyor’s report of the damage definitely holds ample weightage in the decision.
Once the insurance company has accepted the claim, the next step of the process is settlement of payments incurred towards the repairs to the house and restoration of the contents of the house which have been damaged or lost. For any specific questions regarding the claim settlement process, you can also contact your home insurance provider to provide you with the necessary details. After all, your house is also one of your most prized investments which must be provided with adequate protection, just like your loved ones.
For example, the claim settlement process for House Insurance involves the following steps.
- Policyholders must immediately inform the company about the claim by calling on their 24/7 helpline number (toll free).
- Following the intimation to the insurance company, the policyholder must provide them with all necessary or relevant information not only pertaining to their policy but also details regarding the damage that has been caused. Once the claim request is Consequently, your claim request is verified and validated, the claim settlement request is forwarded to the insurance company’s Claims Department.
- Once the company has validated and registered the claim request, the insurance company will appoint and send across a surveyor within the next 48 hours.
- Following the Surveyor’s report, you must submit all the necessary documents to the Surveyor. Once the Surveyor has inspected the damage caused, they will prepare and submit a Final Survey Report (FSR) and the required documents to the company within 7 days.
Property Insurance Add-On Covers:
The ideal, comprehensive home insurance policy takes care of all contingencies when it comes to your cherished home. However, modern times have given rise to specific conditions that pose a particularly pressing concern when it comes to your house and the valuables based therein. Hence, add-on covers are offered by insurers to boost the protection afforded by the main insurance policy. These covers come in many types,
- Terrorism Cover - Provides financial protection to your house and the contents therein against acts of terrorism. A very vital component in these times of international strife.
- Cover for Domestic Appliances- Protects your household items including television, refrigerator, air conditioner, washing machine etc., against damage from fire, breakdown, theft, etc.
- Cover for Valuables including Jewelry- Extra protection for your precious possessions including jewelry, sensitive documents, expensive watches, etc., against natural or man-made reasons for damage and/or loss.
- Earthquake Cover- Usually an in-built clause, but also offered as an add-on cover.
Kindly note that the covers mentioned above are the more commonly subscribed options, and naturally, the most popular. For a complete list of add-on covers, consult your insurance company.
Home Insurance Coverage:
A typical home insurance policy, served by an Indian insurer, will provide the insured (house and its contents) protection against the following-
- Natural Causes- Fire, Storm, Hurricane, Tornado, Flood, Earthquakes, Lightning, Inundation, Landslide, Rockslide, etc.
- Man Made Causes- Explosions, Riot, Strike, Terrorist acts, Damage by Aircraft, Implosion, Malicious damage, Missile tests leading to damage, Leakages, etc.
The premium amount applicable to the subscriber is decided by two factors- 1) Location of the insured property, and 2) Applicable tenure of insurance. Ideally, home insurance can stretch from a minimum of 3 years to a maximum of 30 years. Again, these conditions are specific to the home insurance company in question.
Read more about How to choose Home Insurance Coverage
Inclusions and Exclusions of House Insurance:
A good home insurance policy provides protection to your house against unforeseen calamities that are both, environmental and man-made in nature. The basic inclusions and exclusions are as follows-
|
Covered by the Policy. |
Not Covered by the Policy. |
|
Damage by Fire, Riot, Strike |
Consequential loss, Wear & Tear, Depreciation |
|
Damage by lightning |
Damage by War, Nuclear War, Invasion, etc. |
|
Hurricane, Storm, Cyclone, Floods |
Negligent usage, excessive work pressure leading to damage |
|
Earthquakes, Landslides |
Property that is still under construction |
|
Damage by Aircraft, Missile, Acts of Terrorism |
Damage or loss of specific items such as jewelry, sensitive documents and money (unless specified) |
One of the premier highlights of a good home insurance policy is the ease with which claims can be raised and the same are correspondingly settled. Claim process, in general, involve the following well-coordinated steps,
- To raise a claim, contact your insurance company via the mediums provided (this is usually with a call or email to the customer support department). When talking to a customer support representative, state the details of your claim clearly and receive a confirmation for the same.
- Communicate the following details when stating your claim-
- Name of Insured
- Policy details including policy number
- Contact details of the Insured
- Brief description of the loss/damage
- Date, time and location of loss/damage
- The following documents will be required when filing your claim-
- Completed claim application form
- Certificate confirming death/disability
- Documents proving hospitalization and the subsequent discharge
- Other documents as required by the insurance company
- Ideally, a claim will be settled within 7-10 working days from the date when the claim was raised.
Ways to Lower your Home Insurance Premium Costs:
A comprehensive home insurance cover is very essential to protect your most cherished investment, your home, from unforeseen mishaps. But, with increasing premium costs, it is becoming difficult to fit a home insurance plan to your yearly budget. Here are some tips to lower the premium costs when it comes to insuring your house.
- One of the easiest ways to reduce your home insurance premium costs is to compare all available home insurance policies before applying for one. Check the policy inclusions, exclusions and features to know which scheme offers the best value for money.
- Check for discounts offered by your insurer. Many insurance providers in India offer special discounts when you install monitored security devices like smoke detector and burglar alarm.
- Increasing the deductible amount for home insurance also reduces premium costs. Home insurance deductible is the amount that the insured has to pay when filing a claim.
- Make sure that you have sufficient amount of coverage but is not covered for very unlikely risks. Also, eliminate all unnecessary add-on covers.
- Different types of home insurance policies are offered depending on if you are a home owner or a tenant, choose your home insurance plan accordingly.
How to Compare Home Insurance Policies:
Before you buy a comprehensive home insurance policy, ideal to suit your needs, it is very important that you compare all the available policies being offered by different insurance providers. This is extremely crucial to ensure that you get the best deal. When making the comparison between various home insurance policies, you must keep in mind the following points
Coverage and Premium
When deciding which home insurance policy to buy, coverage is one of the most important factors. The policy you choose must offer coverage against all the risks that your house is prone to. For instance, if you live in a hilly region which is prone to landslides, or in an area frequented by cyclones, floods or earthquakes, then you must choose a policy which provides coverage against such dangers and natural disasters. You should ideally choose a home insurance policy which provides comprehensive coverage against a wide range of perils.
Cost of deductible while calculating premium
Every home insurance policy charges a certain amount of premium. While considering the premium amount charged by a policy, it is a must to take into account the cost of deductibles (chargeable with the same policy). Remember that the cost of deductible is inversely proportional to the premium amount charged, i.e. the higher the amount of deductible, the lower premium and insurance fee.
Premium amount
Every home insurance policyholder, has a legal commitment to making regular payments for the coverage provided by the insurance company, as per the chosen policy. This makes insurance premium an important factor when it comes to choosing a policy. As the premium amount is going to form a considerable part of your future expenses, it needs to be within your monthly budget. The smart solution to this is to compare between multiple insurance policies, find out the coverage each one of them is providing and at what cost, and settle down for the one which suits your budget and your needs the best.
Claim settlement time
Nobody wants to wait for an eternity for the settlement of a filed insurance claim. Considering that the policyholder who has filed for an insurance claim is already dealing with the emotional burden of damage/loss, the least that the insurers can do for him/her is to make claim settlements a quick and hassle free process, to alleviate his/her worry. The amount of time a company takes for settlement of claims is a very crucial factor in determining its efficiency. A good insurance provider, which prioritizes your interests, is bound to make quick settlement of claims, making it a worthwhile choice.
Explore quotes online
Home insurance policies are available online, for buying, renewing and researching. This makes it easier for customers to get authentic information about multiple policies available in the market, online. Another advantage is that the quotes offered online are often cheaper than what you might get from an agent or at the insurance office. Hence, be prudent and compare between all the possible choices of insurance policies available.
Read more about How to Compare Home Insurance Policies
Does Home Insurance in India offer Cover against Natural Disasters?
- A home is often the dearest asset for many people in India. A huge part of an individual’s savings and income is spent on buying and furnishing his own house. But, most of us do not pay the same attention when it comes to investing in a good home insurance scheme that would safeguard our home against man-made mishaps and natural disasters. It is important to prepare for the future given that a calamity can strike anywhere. Take the example of recent earthquake in Sikkim, tsunami in Southern coastal India and Mumbai floods - if there’s something that can learn from these incidents, it is the fact that nature is unpredictable. You cannot control nature but you can definitely avert the financial consequences, mental distress and the cost of rebuilding your property, if a natural calamity strikes with home insurance.
- A comprehensive home insurance policy will cover the cost of structure and contents of the house. Most of the home insurance schemes in India will offer cover against earthquake, floods, storm, and cyclone and also the cost of alternative accommodation, if you have to take one in case your home is damaged. With a good insurance policy, you can cover the costs of rebuilding your house and get back to your normal life without any pressing monetary concerns.
Tips for an Effective Home Insurance Policy :
- Know your Policy- Read through all the associative documents to know everything about your chosen home insurance policy. This will help you avoid surprises when raising claims.
- Compare, Compare, Compare- Different policies offer different features and benefits. Compare the various available options and choose the one that suits you the best. BankBazaar.com should help you here.
- Don’t Lose Time when Raising a Claim- Know the maximum time limit before which you must raise a claim in appropriate cases of damage/loss of property. Waiting too long could potentially deprive you of many applicable benefits. Again, complete knowledge of your policy is crucial.
- Reduce Premiums by taking Preventive Actions- Installing a competent security system, smoke detectors, investing in a good security vault or hiring a bank vault, keeping all valuables under lock and key, using extra heavy duty door locks, etc. are preventive measures that help you avoid situations wherein you need to raise claims. No claims equate to lesser premium amounts.
- Don’t Assume- Have a query with regards to your property insurance policy? Avoid assumptions and contact your insurer to clear the confusion. This could potentially save you a lot of time when raising a claim on the policy at a later date.
- Get More Protection with Add-On Covers- By subscribing to add-on covers, you are likely to account for specific conditions that aren’t accounted for, or are not comprehensively covered by the main policy. This enhanced level of protection could come in very handy when faced with a very specific type of contingency afflicting your property.
- Rethink and Restock your Policy Regularly- Getting married? Expanding your home? Buying that costly furniture? All of these events must likely prompt you to visit your insurer and amplify your home insurance policy accordingly. Things change through the course of a life- your policy must change too.
Read more about How Can You Save Money On Home Insurance
Home Insurance FAQs:
- Is home insurance absolutely necessary? While not mandated by law, a comprehensive home insurance policy protects your cherished home and its contents against a wide variety of threats and contingencies. Your home is not just an incredibly costly investment, but one of the intensely personal and important ‘things’ that you can own. Protect this investment, avoid financial liabilities and enjoy peace of mind, even when your home is damaged or lost because of natural and/or man-made reasons.
- Must I get a terrorism cover? I live in a safe part of India.
A terrorism cover insures your home (with its contents) against damage/loss caused by acts of terrorism. This is usually an optional cover. Irrespective of where you live in India, terrorism can find its way to your doorsteps. Be prepared for all such eventualities, with a very nominal increment to your applicable premium.
- What documents must be submitted when filing a claim?
The complete list of documents is as follows-
- Duly completed claim application form.
- In case of theft or property damage, an FIR is required from the local police station.
- Estimates of repairs, receipts, invoices, etc. (copies only).
- In case of personal accidents- Medical reports, document detailing discharge, disability certificate, etc.
- Satisfaction letter, if availing cashless facility at one of the insurer’s network garages.
- Any other document, as and when required.
- What are the type of properties that aren’t usually covered by home insurance policies?
- Property that is still under construction
- Land, plots etc.
- Shops and other commercial spaces
- ‘Kutch’ constructions
- Residences that also double up as offices and vice-versa
- What is the eligibility criteria to apply for a home insurance policy?
Individuals-
- Must be a resident Indian
- Must be owner and/or occupant of the property to be insured.
Societies-
- Must be authorized member of the society’s managing committee.
- While buying a Home Insurance policy, is it compulsory to get coverage for building?
No, it is your choice whether to insure the building/structure when you buy home insurance. However, it is recommended that you go ahead and invest in a cover since you cannot foresee the future which may bring disasters such as fires, riots, natural disasters etc. You can look for insurance companies that have covers for everything from the building, fittings, electricity cable and so much more. You can look for more specific covers as well such as cover for the loss of key etc. are also available. Make sure that you think over what your priorities are and get a home insurance policy that covers everything that you think needs to be protected. Spending a little extra while getting a new house can save you a lot of trouble and worry in the future.
- If my household goods are damaged during transit, will my home insurance policy cover it?
Most companies do offer cover for any loss/damage to your household items (excluding jewels and valuables) that happen during removal/shifting of items. This damage/loss may be due to natural calamities, accidents etc. This holds true only for transport within India.
- What does ‘debris removal’ mean?
In the unfortunate event that your home has been damaged (either the whole or partially), the debris will take up space which will have to be removed first in order to reconstruct the structure. This is ‘debris removal’. In India, several insurance companies provide reimburse your money for this service, subject to deductions.
- If I sell my house, what will happen to my Home Insurance?
If you sell your insured house, the home insurance policy will be cancelled as soon the ownership is transferred. The insurance company will reimburse the remaining premium for the remaining period of the insurance.
- Is it possible for me to take home insurance policy from two different insurance companies?
Yes, you can buy home insurance policies from two different companies which means that at the time of claim both the companies will pay you on a proportionate basis.
- If I have a property financed towards housing loan from the bank, is it possible for me to get Home Insurance policy for the same property?
Yes, if you have a residential buildings which is financed by bank/financial institutions, you can purchase a home insurance plan and have the interest of the financier endorsed. You will need to check the terms and conditions of the policy about this before purchasing.
- What is Public liability policy?
Public liability policy refers to the amount which you (the insured) are liable to pay in the event of damage to third parties. This damage can include bodily injury, accidental death and loss/damage to the property which belongs to a third party. Depending on the insurance company’s terms and conditions, this also includes the legal cost and expenses sustained in defending the case. It is possible to insure more than one unit which is situated at different locations with the same policy.
- What is No claims discount?
No Claims Discount (NCD) is a discount many insurance companies give to the insured on their following insurance premiums if the insured haven’t made any claims during the insured period. NCD is calculated based on the number of years that a customer hasn’t hade claims.
No-claims discount will make sure that you get a discount on next year’s household insurance premiums, if you have not made any claims in the previous year. It’s like a reward from the insurance company and can be a great way of cutting the cost of cover. - What is loss of rent cover?
the contract, as it is seen in most cases, it does not oblige the landlord to provide alternative accommodation to tenants if the property becomes uninhabitable due to an insured event like fire, flood etc. If this is the case, loss of rent clause will cover the income that the landlord will suffer when tenants don’t pay rent anymore.
- What is Temporary resettlement cover?
Temporary resettlement cover is the amount the insured will get if their insured property is uninhabitable and they need to stay somewhere else temporarily. This cover will take care of the expense.
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