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Buying home insurance? Here are some tips
BankBazaar.com | April 06, 2009 12:55 IST
Most of us are aware of insurance in some form or other. These are the all too common life insurance, car insurance and the like. However, many consumers are not aware of all the details about the insurance for one of the most important asset that you have, your home.
So what is home insurance? Home insurance is not unlike life insurance. In a life insurance scheme, your nominees or dependents are offered an amount in case of your untimely death, due to natural causes or otherwise.
Similarly, home insurance can cover losses to the structure and contents of your home from any natural or man-made calamity.
It protects your house from unwanted, unforeseen causes that can damage it such as fire or lightning and smoke, storms of all kinds, explosions, riots or civil commotion, burglary, breakage of glass, vandalism, hooliganism and vindictive mischief.
The only difference between the two is the value of the object involved. Of course, your life is very precious but so is your house which you have acquired after much investment, hard work and planning.
A valid question is how are the value of the house and its contents assessed? The value of your house is assessed as per the area of your home multiplied by the rate of construction per sq feet, as on the date of taking the policy.
For example, if your home is of 1,000 sq feet and the construction rate per sq feet is Rs 800, then the sum insured for your home's building structure is Rs 800,000.
On the other hand, the contents are assessed on the market value of the items. This means that if there were a loss, the claim would be paid on the value of purchasing a similar new item, less depreciation for the usage.
So you ask, how does insurance help? In the event of some burglary, fire or any of the reasons mentioned above, an individual can claim the amount he or she has lost due to the reasons mentioned earlier.
Home insurance insures the applicant's house as well as everything of value inside it including jewellery, television and other electronic items in the house.
But then again, what are the benefits of obtaining home insurance? Taking home insurance has many benefits.
Normally, there are many things in fine print when it comes to insurance companies. So what are the exclusions of a home insurance policy?
The company is not liable to make payment for:
A natural query in your mind would be of any points to be considered before obtaining a home insurance policy.
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