A home is much more than a combination of 4 walls and some contents like furniture and gadgets in it. To protect it, you may put the heaviest of the locks, hire an army of security guards and install CCTV cameras all around, yet all that together cannot protect your home from certain damages like in case of a natural calamity.
With increased levels of global warming, we are witnessing greater than before incidents such as hurricanes, cyclones, floods, and typhoons, which cause a great deal of destruction to men and material. The state of Kerala recently went through one of the toughest phases due to floods and incessant rains.
Often, savings of an entire lifetime is put at stake to have a proper roof over your head. And imagine the agony and distress if that home gets damaged due to actions beyond your control. While there is no remedy for your distress, a home insurance policy can at least take care of your financial loss.
A home insurance policy aims to protect your home and its contents against damages caused events such a fire, natural calamities, theft, burglary, terrorism, etc. depending upon the cover you have.
What is a Standard Homeowners Insurance Policy?
This is the basic cover provided by insurers when you go in for a home insurance policy. This policy is also known as Standard Fire and Special Perils Policy. This sort of policy covers the structure of your home. When it comes to the structure of your home, the cover is provided for the reconstruction cost of your home. You should be mindful that the market value of the house is not taken into account here. To be able to insure your home for the right amount of reconstruction cost, it is good to get an architect/civil engineer to assess the cost of reconstruction before you buy the policy. Generally, you get to choose the value of the structure of your home. The figure declared by you should be enough to compensate you to rebuild your home in case of an eventuality. On the other hand, you should also remember that if you provide too high a cost, you pay more towards premium.
The other covers provided in a standard homeowners insurance policy are:
Damage caused by natural calamities like lightning, landslides, floods, earthquake, inundation, storm, and bushfire
Damage caused due to fire
Damages caused to your home on account of other man-made events like explosion, aircraft strike, missile testing operations
Damages to your home caused by Rail/Road, vehicle or animal by direct contact (excluding damage by own vehicle)
Damages due to riots, strikes, and other malicious acts.
Are These Covers Clear and Stand Good at All Times?
This is the question that many of us think about. It is very essential that you know when the cover stands good and what the situations are under which the cover does not stand well.
There is no blanket coverage that one can avail for all sorts of situations. Your standard householder's policy will not hold good under the following conditions:
Willful damage to the property
Damages caused to fair wear and tear due to the passing of time or any other reason
Damages caused to due to negligence. (For Ex: Not locking the house, etc.)
Losses caused under mysterious/unexplainable situations
Damages caused due to war and its consequences
The loss of property caused when it is left unoccupied/unattended for a long period of time
Looking at the inclusions of a standard householder’s policy, you might feel that there are many more situations which might need a cover. So, we bring to you some of the other
covers available that you can purchase as an add-on cover or customize your standard policy to include:
Contents Insurance: A home is not just the structure of your house. Every home has innumerable gadgets and contents like wardrobes, home theatres, laptops, computers, refrigerator, etc. The cost of these may add up to quite a hefty sum. You have an option to buy a cover for the contents of your home, which will provide you a cover for replacing these contents, in case of an eventuality. This insurance works well even for tenants, as “contents only” insurance can be bought as a standalone cover too.
Burglary/Theft Insurance: The chance of your home being robbed might be much more than an occurrence of a natural calamity (Of course this would also depend on the area that you stay in!). This is one insurance cover that any house owner or a tenant should have. This cover will give you protection against damage or loss of contents of your house due to theft/burglary. However, one important point that you should bear in mind here is that the cover does not hold if a person like your domestic help or a known person was involved in the theft.
Cover for alternate accommodation: There may be eventualities where your home is damaged and you have to reside temporarily at a different place till your house is rebuilt. This cover takes care of the expenses incurred on such stays. Generally, this cover is given for a specified duration of time.
Third Party Liability Cover: A third party liability cover works somewhat like a third party insurance cover on your vehicles. This cover goes on to indemnify a third party for eventualities that happen to them while at your home. This could also extend to other things at home. For Ex: A tree in your compound that may fall on your neighbor's wall and damage it.
A standard householder’s policy is something every house owner should possess to protect their property. Additional covers can also be added as per the requirements of the individual.