House Insurance : A Policy You Must Have!

There are two kinds of home insurances: one for the structure and one for the contents. Building insurance protects the fabric and permanent fixtures of the building, whereas content insurance covers personal goods such as furniture, jewellery and clothing, among other things. The article provides further details

Every Indian’s ambition is to possess a piece of property, especially for living purpose. However, in the exhilaration of purchasing our dream house, we sometimes neglect one of the most critical components of homeownership – home insurance. This is a genuine fact: we invest our hard-earned money and energy to create our home, but preserving it is constantly at the bottom of our priority list. By failing to get house insurance, we subject ourselves not only to the dangers posed by fire and other disasters such as lightning, flood, earthquake or storm, but also to threats such as burglary.

Even though having home insurance would not help you prevent these unprecedented catastrophes, it will help you recover financially from such losses. In this post, we will look at items you should bear in mind while purchasing house insurance. There are two kinds of home insurances: one for the structure and one for the contents. Building insurance protects the fabric and permanent fixtures of the building, whereas content insurance covers personal goods such as furniture, jewellery and clothing, among other things. Let’s take a closer look at this.

Flood, fire, storms, subsidence, intentional damage or vandalism, falling trees or branches and collision from There are two kinds of home insurances: one for the structure and one for the contents. Building insurance protects the fabric and permanent fixtures of the building, whereas content insurance covers personal goods such as furniture, jewellery and clothing, among other things. The article provides further details vehicles, including anything that may fall from an aircraft, are all covered by building insurance. Content insurance, on the other hand, protects your possessions from flood, fire, earthquake damage and vandalism. However, it is critical to have both types of insurance, which are typically included in a complete package. Comprehensive home insurance protects not only the structure of the property but also its contents. Furthermore, it contributes in the reduction of premium costs.

Furthermore, it is important to recognise that home insurance coverage does not cover the cost of land. It just covers the building costs. The construction value is calculated by multiplying the carpet area by the cost of the building in your city. As a result, whether you are intending to buy or already own a house, nothing is wiser than purchasing comprehensive coverage. The landlord is responsible for a majority of the building insurance for renters. However, before purchasing house insurance, you must keep a few things in mind. We will go through this in more detail in the next few paragraphs.

Reading Policy Document
One of the first things you should do before purchasing house insurance is to engage in a thorough reading of the policy document. A home insurance policy is a vital legal document that you should carefully study and comprehend. If there is MF page - 18 House Insurance: A Policy You Must Have! DSIJ.in APR 11 - 24, 2022 I DALAL STREET INVESTMENT JOURNAL 67 DS something bugging you, you have a 15-day free look-up period during which you can cancel your coverage.

Calculating Insurance Amount
The following step is to determine how much house insurance you should get. And, in order to arrive at a realistic figure, you must first determine the actual value of your home. So, if your residence is destroyed, you should be aware of the repair or replacement costs involved. If you want to know the genuine market worth of your house, you should consult with an assessment firm or real estate valuator. It is critical to assess the amount of insurance required since the greater your coverage, the less you will have to spend out of cash. However, taking out more insurance than necessary will also raise the cost of the premium.

Building Coverage
When purchasing building insurance, be certain that your home is insured for the rebuild value rather than the market value. The rebuild value is not the current market worth of your home but rather the total cost of restoration.

Contents Coverage
When purchasing contents insurance, it is a good idea to make a list of the values of each item in your house, from laptops to clothes and from glassware to gadgets. Furthermore, you should check to see if your house insurance covers objects such as the contents of your wallet or backpack, your garden, shed, storeroom, garage, and so on, as well as the items included inside. It makes sense to pay more for objects that are damaged or stolen away from your house if you can include them. Antiques, jewellery, high-value electrical equipment, mobile phones, pricey technical gadgets and other valuables may not be covered under the basic conditions of content insurance. However, you should verify with your insurer and, if necessary, have supplemental coverage in place.

When purchasing content insurance, be sure to select the ‘new for old’ option for your goods. This will allow you to receive replacement of the damaged or destroyed things with equivalent new products rather than the amount the old items were worth. The most essential thing to remember is to determine the correct worth of your items. Undervaluing your belongings can leave you underinsured, while overvaluing would raise the cost of your insurance coverage needlessly. Keep your inventory list, together with your house insurance policy, in a fireproof safe – ideally a bank locker or a locker at your office.

Replacement Cost
When purchasing home insurance, there are two cost definitions available: replacement cost and real cash value. In the event of real cash value, you receive the replacements or repairs to your home once depreciation is taken into consideration. However, in the case of replacement cost, it examines the price required to replace, rebuild or repair damages to your property using comparable quality materials, without taking depreciation into consideration.

Excess
The excess is the amount that the insurer will not pay if the claim value is less than a certain amount. Most house insurance policies include both a mandatory and discretionary excess. If you choose to pay a bigger discretionary excess, the cost of the insurance will be cheaper. As previously said, in such a circumstance, you should ensure that you can pay the extra.

Covering Unusual Property
If you own an uncommon property, such as a refurbished mill or a listed structure, or if your house has a distinctive feature such as a thatched roof, you will need to get specialised coverage. Premiums for such odd properties are often greater because the risk is on the higher end for the insurer.

Discounts
Who doesn’t like a good deal? You may obtain discounts on home insurance premiums just like any other product. This works in the same way as health and vehicle insurance do. Maintaining excellent health helps you earn discounts on health insurance, and having effective security systems in your automobile draws savings on car insurance costs. Similarly, everything that increases the interior and external security of your property might result in a premium reduction. Fire alarms, sprinklers, deadbolt locks, a house burglary alarm, updated wiring, electrical and heating systems, well-maintained and sturdy entrances, stairs, walkways and driveways, among other things, might help you receive discounts. Having your house near a fire or police station might also help you get big discounts.

Deductibles
This feature is provided in practically all general insurance policies. Deductibles are the amounts of money you must pay out of pocket for each claim. Higher deductibles may be less expensive. As a result, when selecting an insurance, be sure that the deductibles are limited to what you are comfortable paying in the event of a claim.

No Claims Bonus (NCB)
This is also one of the benefits that you will discover in the majority of general insurance policies. If you haven’t filed a claim on your house insurance in over a year, check with your insurer to see if you qualify for the NCB. This is because doing so will significantly reduce your premium cost.

Reviewing of Home Insurance
It is critical to check and analyse your home insurance requirements on a yearly basis, just as you would with any other type of general insurance. Remodelling, the installation of a new room, new insulation or wiring, and other improvements raise the value of your house while covering the replacement cost.