Real estate news on Are you aware of Home Insurance?

Property insurance, Home Insurance
Posted on Mar 03, 2015

In a recent Magicbricks poll, 374 people said that they didnt have a home insurance, 174 admitted that they were not aware of it and only 129 people said that they had insured their homes. The concept of home insurance is not so popular in India and very few find the need of taking it. Gagan Anand, country manager, Torus Business Solutions Pvt Ltd, talks about the possible reason, “I personally feel people in India are either not aware or do not bother to consider home insurance important. Either it is due to lack of awareness or due to lack of measures laid down by our government that very few know of its existence.”

An important question that many ask is, “Do we really need a home insurance or is it just an extra cost?” to which Anand replies,  “It is one of the key insurance that every Indian should buy, considering the amount of money that is being spent to buy a house. People spend almost their whole life savings to buy a house for themselves and the biggest pity is that, there is no sensitization amongst people to spend that extra amount to buy insurance to mitigate the risk.”

In addition, he feels that the overall cost is low. “Home insurance typically ranges from Rs 800-1000 per 10 lakh worth of house property per annum. It is not very expensive,” says Anand.

There are two types of home insurance:

-Building Insurance which covers permanent fixtures and fittings, and

-Content Insurance which covers things you keep in your home

Generally, home insurance provides protection for both home and its contents in case of fire, falling trees, water damage from leaking pipes and theft. To secure your home from floods, earthquake and other disasters, you need to buy an additional cover.

However, there are a few exclusions in such policies, such as a willful destruction will not be covered in the insurance. Similarly, loss or damage caused by depreciation, wear and tear is also not covered.

People can insure any residential building, independent house or a flat. However, under construction properties, 'Kutcha' constructions, residence-cum-office properties and land are not covered under home insurance.

How much coverage do you need? Home-insurance policy should cover the reconstruction and furnishing cost of the house in the event of any loss or damage. Furnishing means replacing the item which the house already had. Coverage is of two types:

-Actual Cash Value- the price you get is the value you could have received if you sold the thing as it is in the current market. It is generally lower than what you initially pay earlier

-Replacement cost- the amount you get for what you initially paid for

Claim requirements:

Basic information one must have includes equipments damaged, location, cause and approximate amount of loss and the policy number. In case of a damage caused by fire, owners need to have the fire brigade report (if applicable), FIR (if applicable) and repair or replacement bills. Loss caused due to burglary requires an original invoice mentioning value of the items stolen, replacement cost, FIR and final police report.

Once you have registered the claim, a surveyor is appointed to estimate the loss and further procedure is taken up.

So, if you dearly love your home and want safety for your possession, taking a home insurance is a wise idea!

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