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Importance of Having a Home Insurance Policy in India

Home insurances provide coverage for any damage or losses to the property. In a way, property insurance saves the holders from spending money from own pocket to rebuild the property. Despite their benefits, house insurance is one of the least purchased policies in India.

Why Indians Need Home Insurance?

India has experienced exponential growth in terms of industrialisation in the last few years. Many Indian cities have become working places for millions. This working crowd have mostly relocated from their hometown to these big cities. As a result, the number of home buyers has increased with a significant rate. However due to overcrowded cities, the cases of burglary, house-thefts have also increased.  

Moreover, in the last couple of decades, many disastrous natural calamities have hit the nation. Kerala and Chennai floods, Tsunami at South India and Mumbai Rains are a few of them who costed a toll on thousands of lives and their properties. Many of them are still suffering from losses, as they never secured their properties with home insurance.

It is the time when Indians need to be aware of a policy that provides financial protection from different damages happened to the house. Home insurance covers the losses caused by natural calamities like flood, earthquakes along with artificial reasons like burglary and vandalism.

3 types of home insurance cover:

Let’s assume three friends Alok, Raj and Sneha living in the same building bought home insurances with 3 different types of covers. Their building is 20-year-old with their flats occupying 1,500 ft2 of the area with a cost of flat is Rs. 6,000/ ft2 (Rs. 90 lakh) and construction cost Rs. 3000/ ft2 (Rs. 45 lakhs).

  1. Alok chose the cover providing Indemnity value. This covers the cost of reconstruction based on the current market value and age of the property along with depreciation. Deprivation is 20% for Alok’s flat, thus sum insured would be Rs. 9 lakhs (20% of total construction cost).
  2. Raj chose the cover providing Agreed value. This is the value of land multiplied by the cost per square foot. Thus, the sum insured would be Rs. 90 Lakhs.
  3. Sneha chose cover providing Reinstatement value. This is the amount equal to the cost of construction, excluding the value of land. Thus, the sum of the reinstatement value for Sneha’s house will be Rs. 45 lakhs (total cost of construction).

Insurance for the content in house

The home insurance provides coverage for loss of content like electronics, jewellery and furniture. There are some advanced home insurance packages that cover the belonging of holders after damage, loss or theft.

Houses are places where you celebrate many moments of happiness. They are also the shelter where you found solace. Just like they protect from rains and sun, it is your responsibility to protect them from any danger. Some of the known Insurance companies like Reliance General Insurance and many more have designed plans for Home Insurance India. Chose the suitable and secure your house.