How to choose a home insurance policy

Insuring your home is as important as insuring your life and your health. You can get compensated for damages to your property and the appliances in your house.

Kavya Balaji   /   March 19, 2021

Less than 1% of homes in India are insured. Home insurance isn’t given as much importance as life insurance. So, what is a home insurance policy? Home insurance policy is a kind of property insurance that covers losses and damages to an individual’s house and assets in the house. Most general insurance firms provide home insurance covers in the market. 

You can find various kinds of home insurance policies to protect your property and its contents. These may include cover for household goods, furniture and gadgets. Note that most plans provide coverage against fire, theft and burglary. Most policies cover damages due to natural calamities such as storms and rain. The premium for a sum insured of Rs. 1 crore is usually priced at only Rs. 5,000 to Rs. 10,000. There are even policies that offer home insurance for less than Rs. 100 when the sum assured is Rs. 3 lakh.

If you didn’t know home insurance products not only offer cover against damage to property, they cover accidental damage to smart phones, laptops, digital/ video cameras. Need to know how to choose home insurance? You need to understand the primary and most popular kinds of home insurance policies offered in India and choose one that suits your requirements.

Standard fire and perils policy

This is the standard home insurance policy offered by all popular insurance companies. As the name of the policy suggests, it provides protection against fire outbreak and other perils. This home insurance policy can be purchased by house owners for their own house and also by tenants who are residing in a rented house. How is the sum assured calculated for this insurance policy? The cost of reconstruction of the building (excluding the value of the land) will be paid as sum assured by the insurance provider. A standard fire and perils policy will provide protection for the insured home against damages caused due to the following reasons. 

  1. Damages to property caused by natural calamities such as fire, lightning, bush fire, forest fire, volcanic eruptions, earthquakes, storms, floods, etc.
  2. Damages to property with malicious intent
  3. Damages to property caused by third party vehicles including train
  4. Damages to property caused by your own vehicle (even if it is not included in the policy)
  5. Damages caused due to explosion/implosion made during man-made anti-social activities such as strikes, riots, etc.
  6. Damages caused by rockslide or landslide
  7. Damage caused due to bursting or/and overflowing of water tanks, pipes, etc.
  8. Damages to the property due to missile testing operations
  9. Damages caused due to leakage of water from automatic sprinkler installations

Building insurance

This is a kind of home insurance policy that provides protection for damages to the structure of your house from different kinds of risks. In addition to this, the policy will also protect all of the permanent fixtures within the house. This will include the fittings in your kitchen and bathroom, the ceiling/roof of the insured house, etc. In case the house has other buildings such as garages, sheds or an outdoor room/house, those buildings will also be covered under the policy. 

Contents insurance

Not all home insurance policies cover damages to your property and the contents in your property. If you need protection for the appliances and other things in your house, you need to have a contents protection in the home insurance policy. Contents insurance is a kind of home insurance policy that protects the things such as appliances inside your house from damages and loss due to theft, fire, flood and other such mishaps. Most of the policies cover things including television, refrigerator, your documents, portable equipment, jewellery, etc. 

Public liability home insurance

If you have invited guests to your home, public liability home insurance will protect them from damage to their things inside your insured house. 

Burglary and theft

If there is any burglary or theft in the insured house and any valuable contents are stolen or damaged, the burglary and theft home insurance policy will protect you.

Home insurance for owners

As an owner of a house, you will be responsible for the maintenance and upkeep of the property whether it is an apartment or independent house. You can use a standard buildings home insurance policy for protecting your home if you are renting it out. 

Home insurance for tenants

Tenants who rent a house bring their own things such as furniture, television, refrigerator, etc. They will not need building protection as they don’t own the house. If you are a tenant, you can buy a contents home insurance policy. This kind of insurance is a must have for every tenant. It will help you against damages to the things in the house.

Personal accident 

This cover can be included in your home insurance policy for you and your family. A compensation is provided by the insurance company in case of permanent disability or death of the insured person due to accidental or physical injury.

What is not covered under home insurance

  1. Damages to unoccupied property (if it has remained unoccupied for long time)
  2. Money in the form of cash, antiques and collectibles
  3. Damages to property due to war
  4. Damages to property due to wear and tear

For getting home insurance, you need to fill a proposal form. You have to declare the building and contents of the building. You can choose from some of the best home insurance policies in India as they are available online too.

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