All those reports about earthquakes damaging homes, floods ravaging them, even in urban areas, fires spreading like, well, have got you thinking. You are convinced that natural calamities can wreak havoc on your dream home and cause some serious damage, not just to your home, but to your pocket as well. And you think it’s time to take remedial action. You are not one of those who waits for disaster to strike before doing something as you believe in preventive care. Yes, you are all geared up for buying home insurance and doing your bit to safeguard your most expensive asset.
That’s the sensible thing to do.But have you familiarized yourself with all the things before buying home insurance? Here are a few tips to help you make a well-informed decision as you go about scouting for the best home insurance policies in India.
1. Take a call on what to insure
The first thing you need to do is to decide exactly what kind of coverage you need. Do you need just basic fire insurance, or the Householder’s Package Policy (HPP), which provides protection against fire, and other allied calamities, such as lightning, storms and floods, as well as riots? Some insurance companies seek an extra premium to cover earthquakes and landslides. If you buy an add-on cover, you can also insure your structure and its contents against terrorism. An HPP also offers optional cover that insures the contents of your house against burglary, damage, mechanical or electrical breakdown.
So, do you just want to insure the land and the structure, or contents of the home as well? Depending on your requirement, you can opt for a plan that suits your individual needs. It is best to take a comprehensive home insurance policy as it covers most eventualities.
2. Under insurance doesn’t work
Most of the times, we think of home insurance as an indulgence, an expense we can do without, or a necessary evil. This kind of thinking makes people undervalue their property to save on the premium. What they do not realize is that it is self-defeating to undervalue their precious home; it’s just a short-term gain. You are not insuring your home to save a few bucks, but to get adequate relief, should anything go wrong. Under insuring your property will not give you sufficient cover to restore and repair your home if it is struck by any calamity. Evaluate your property correctly and accurately, take adequate cover, and then rest easy.
3. Don’t jump at the first policy you come across
You have seen those ads on TV that keep telling you to compare policies before zeroing in on any one of them. They are sending you the right message. Do not be in a rush to buy a home insurance policy. Take the trouble to go online, check out your options, do your research, and then take the policy that suits you best.
4. Learn how to compute the premium
The premium that you pay for your house insurance policy depends on many parameters. It is essential for you to understand that your premium will be decided by factors like, cost of reconstruction in your geography or area, actual area of house, value of content, etc.The answers to these questions will enable you to compute the premium.
5. Insurance is a long-term affair
Do not look for short-term solutions when it comes to insuring your home. You are the owner of the home, not the tenant. You will be there for many, many years and not just a year or two. So, infuse some permanence in your policy as well. Take a long-term cover, say 10 years or so. Thinking long-term has several advantages – it not only does away with the hassles of renewing the policy every now and then, it also reduces the cost of the premium. Insurers like ICICI Lombard offer up to 50% discount on a 10-year plan.You are here to stay – make your insurance lasts a long time.
6. Check exclusions: While it is important to know what your home insurance policy includes, it is equally necessary to understand what is not included in the policy. For instance, wilful destruction of a property is not covered. You do not want your claim to fall under the exclusion category, therefore, check the exclusions beforehand.
In the end, you are securing your most important asset. Cutting corners will not help. Take adequate protection, and live your life peacefully.