Importance of Home Insurance for Home-buyers

Date: 17-February,2021Last Updated: 26-September,2022
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Buying a luxurious home is a dream for any home-buyer. You must have researched many properties online through numerous real estate websites and enquire about the property that fits your budget.

However, did you ever give a thought about the importance of home insurance while looking for your home?

Home insurance is an essential factor most people often overlook while purchasing their home.

One in a million unforeseen events might happen around us. In contrast, a home insurance policy will come in handy while tackling unexpected expenses that might arise when any damage is caused to your new home. Home insurance policies are one of the crucial steps in securing your home.

Just locking your home, doesn't guarantee your safety. There are many other factors that might go beyond your control. Some home-buyers might not realize the significance of taking up a home insurance policy.

So, if you are wondering what exactly home insurance is all about,

We will be offering you a beginner's guide about home insurance.

What is Home Insurance?

Home Insurance refers to a property insurance policy that assists you to safeguard your rented apartment or your own home with belongings, from unanticipated circumstances like fire, floods, burglaries, storms, and explosions.

Whether you own or rent your apartment, we suggest you have a home insurance policy covering all the loss caused by accidental events. A good house insurance plan will assess your home's worth, give you suggestions on how to secure your home, and finally help you take precautionary measures to tackle unplanned events. The insurance policy will also save you from incurring a massive amount of money on renovation or rebuilding your home structure from damages.

How does a home insurance policy usually work?

You can start your home insurance policy by paying an initial premium amount to the insurance provider. You will need to pay the premium amount as per the stipulated timeframe to acquire the insurance coverage. The insurance coverage and the premium amount criteria will differ concerning your insurance provider. You can analyze house insurance plans to discover the right insurance policy that fits your budget.

The premium amount for an old property will be higher when compared to a newly built home. Modern homes and apartments will be well-equipped with essential safety measures like security surveillance systems, fire extinguishers, etc. These mentioned safety measures will decrease the chances of electrical and environmental adversity.

Home insurance companies provide numerous house insurance policies such as content insurance, building insurance, tenant's insurance, personal accident cover, landlords insurance, public liability coverage, etc. As a suggestion, it is quite preferable to initiate a conversation with a reliable home insurance professional who would tell you about these coverages and help you to find the best option for you.

Now, let us give you some insights about the types of home insurance policies or the items covered under a home insurance policy:

  • Dwelling Coverage:

Dwelling home insurance coverage is the foremost basic of insurance policies. The coverage offers protection to the home structure that includes walls, floors, ceilings, and built-in appliances. The policy covers uncertain events and helps to rebuild your home with adequate protection.

  • Contents Coverage:

The policy protects items that include furniture and clothing. It is a unique type of home insurance policy that protects your house from damages like floods, fire, theft, and other mishaps. Some of your essential documents like jewellery, portable equipment, documents, TV, refrigerator, etc., are covered under the contents coverage policy.

  • Standard Fire and Special Perils Policy:

It is a type of home insurance policy that is offered by a leading insurance company. The policy offers coverage against noteworthy perils and fire outbreaks.

Special Perils Policy and Standard Fire Policy can be purchased by home buyers or tenants who reside in a rented house. The insured sum for the policy can be calculated as Building-Cost of Reconstruction.

The Standard Fire and Special Perils Policy ensure the home is insured from loses and damage caused due to the following reasons:

(a) Natural calamities like fire, lightning, forest fire, earthquakes, storms and floods.

(b) Damages caused by malicious intent and man-made anti-social activities like riots.

(c) Damages caused due to overflowing of water tanks, apparatus, and pipes.

  • Protection from personal accidents:

It is a type of a property insurance policy that covers you and your family. A suitable compensation is given in the case of death or permanent disablement of the insured person due to physical or accidental injury.

  • Burglary Insurance Policy:

It is a type of house insurance policy provided for a house or business enterprise. The policy insures assets like cash and valuables or securities stored inside a safe box. The Burglary insurance policy covers damage or loss caused to the insured property due to burglary or housebreaking.

Tips for selecting the best home insurance in India:

  • Compare Home Insurance Policies Online:

Comparison of home insurance policies will enable you to discover the best home insurance in India. You can pick and judge many home insurance based on varied features. While you compare home insurance premium policies, you can comfortably get the best coverage on your home insurance policy at an affordable price.

  • Check Coverage and Premium:

You need to evaluate the risks that your house might face in future.

For example:

If you live in a flood-prone locality, you need to be assured that your home insurance policy will cover the risks.

Adding to the point, as mentioned earlier, it is advisable to check whether the premium meets your budget or not.

  • Check Claim settlement ratio of the Home Insurance Company:

Usually, an insurance company is typically judged based on the authority's time taken in settling a claim. The primary purpose of home insurance will not be satisfied if you do not get your claim settled within the timeframe. So, it becomes essential to assure your claim settlement record of the home insurance company before selecting an appropriate insurer.

  • The reputation of the home insurance company:

The foremost responsibility of a good insurance company is to ensure customer satisfaction. You need to make sure that the house insurance company provides efficient customer service representatives who are competent to offer quick solutions for your queries.

It is quite sensible to choose a home insurance company that assists you at any point in time.

Let us direct you to the main topic of discussion, which is the importance of home insurance.

We will be listing a few essential points that describe the importance of home insurance.

  • Home insurance protects the home and the contents:

The main characteristics of home insurance are to protect the home from the risk of damages caused by natural disasters or other factors.

  • Home insurance offers financial coverage against calamities:

While purchasing a new home, we suggest you consider acquiring a home insurance policy that gives you financial coverage on man-made and natural coverage that damage your home. You can initiate an insurance claim to get the required financial support required to recover the loss from unforeseen events.

  • Coverage against loss of essential assets:

Home insurance will enable coverage from the damage or loss of your essential assets that are stored in the house. Personal assets like jewellery, gold, cash, furniture, and other appliances will be insured under a home insurance policy. So, if your house is under a threat of unforeseen event, you can claim insurance coverage.

  • The Home insurance policy offers expenses for temporary living:

If you would like to stay in another house temporarily due to any structural damage, you may be eligible to acquire rental expenses from a home insurance company.

According to the insurance policy you have availed, the terms and conditions may vary. So, the home insurance policy will assist you to stay in a rental house until you get your house renovated.

  • Additional Home Insurance Coverage:

Home insurance organizations offer additional benefits like extra coverage limits, exciting add-ones, and premium discount offers that ensure a flawless living experience. Many developers provide complimentary home insurance coverage for a specific timeframe for the advantage of home-buyers.

So, what do you feel about home insurance now?

If you are going to take up a home insurance policy for your brand-new home?

You need to acknowledge the terms and conditions and make sure that you check your home insurance policy every three to five years as the prices for restructuring your home may appreciate, due to the persistent increase in inflation.

If you have any questions related to home insurance, then do drop in your comments below. We will be quite glad to help you out.

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