Securing your home goes beyond locks and hi-tech alarm systems. The best way to protect your home from all types of natural calamities and man-made disasters is by bringing your home under the cover of a house insurance.
Before you decide to take a home insurance policy, there are a few factors that you need to take into consideration.
Buying house insurance is a fool-proof way to indemnify any loss or damage to your home. A home insurance policy offers comprehensive coverage against both man-made accidents and natural disasters starting from flood to fire.
Getting a house insurance plan is easy. You have a wide choice of insurers to choose from like—Bajaj Allianz, HDFC, and Bharti AXA. Each insurer offers a choice of plans that suit the requirements of individual homeowners and buyers. Before you buy home insurance, there are a few factors that you need to keep in mind.
Extent of Policy Coverage
A standard homeowner’s insurance plan has two aspects—insuring the structure and the contents. While the structure covers the home, content insurance covers all valuables and personal belongings. The coverage that a home insurance policy offers is restricted to the extent of reconstruction costs, and not the market value of the home.
- In case a claim is made, the reconstruction value is determined based on the built-up area at a construction rate.
- The construction rate is determined by the insurer. The premium that is due on the policy is quantified by the location, and the tenure of the home insurance plan. Usually, on longer duration plans you can avail great discounts.
- In case of a rented home, you can take a home insurance cover for all your personal belongings inside the house. The sum assured is calculated post a valuation of your belongings.
Before you take a policy, make sure you confirm the claim limit as insurers can differ based on the item that is insured. Also, you need to also consider the sub-limits on valuables. It is recommended that you keep the bills related to expensive household purchases to enable valuation. Do note that the policies do not cover cash, bonds, stocks, and antiques.
Determining the Policy Coverage Amount
A proper valuation of your home and personal belongings must be made to correctly determine the sum that is assured under the home insurance policy. The sum assured should not be less than the value of the insured home and belongings. While a lower sum assured can help you cut costs on premium, in the event of a calamity, the very purpose of home insurance coverage will get defeated.
Over valuing your home is not a good idea because it can lead to complications and hassles when you are making a claim. Also, a higher valuation requires you to shell out a higher premium. So, before you sign on the dotted line, make sure that you take a policy that has the right coverage amount.
Selecting the Right Plan
There are different types of home insurance policies, each differing in the extent of coverage offered.
- You need to look for a plan that offers you good coverage—cushioning your home against all possible loss/damage-causing events.
- A home insurance policy, in addition to covering the monetary loss during the calamity, also compensates you after the calamity. The coverage extends to repairing and renovating your damaged home.
- Also, you can choose a specialised plan in case your home carries a known additional risk. For instance, your home is close to a river, which is prone to annual flooding. The plan that you choose should offer flood protection, and compensate for the costs that you will have to incur in repairing your home and replacing your personal belongings.
Review the Claim Settlement Ratio of the Insurer
Policy pricing is not the only factor that impacts your decision on selecting the right insurer. It is important to verify the history of claims that were settled by the insurer. A way of getting the insurer rating is by going through online forums where past customers would have posted their experiences and grievances.
Policy Upgrade
A renovated home with luxury tiles and fittings needs a policy upgrade. This is needed to ensure that the insurance coverage extends to the current value of your home. Additionally, if you prefer to extend the coverage to new items, you can go for a policy upgrade. In such a case, there will be an increase in the sum assured, with a corresponding increase in premium.
Lastly, the most important thing that you must do before signing a policy is to read the fine print to be aware of the inclusions and exclusions. This will be useful, especially when you have to make a claim.
Factor the above, select the right home insurance plan, and keep your home protected. To know more about home insurance policies, visit Bajaj Finserv website.
