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Introduction

Let’s start this guide by asking you a question – which is the most precious material asset that you own? The answer for most of us is our – homes. Our houses not only provides us with a place to stay, but it is our most expensive asset – ranging from a few lakhs of rupees to even a few crores.

Yet, the majority of homeowners fail to insure their homes. It’s common for individuals to insure their cars (as it is mandatory) but skip insuring their homes. This is because most people do not consider their homes as subject to risks.

Contrary to popular perceptions, homes all over the country are at risk. The number of fire accidents, burglaries, thefts, recorded every year run from a few thousand to lakhs. Additionally, recently, we have seen natural calamities taking a toll on lives and property in different parts of India. Floods, cyclones, and even earthquakes – there are plenty of things that could go wrong with your house.

National records show that nearly 48 lakh Indians suffer from natural disasters every year, that cause damage to properties over Rs. 64,000 crores. Much of North and West India are prone to earthquakes, placing over 200 million people at risk across 100 cities.

This is where – home insurance comes into play. Home insurance is an insurance policy that protects you from financial ruin when you lose the biggest asset of your life in a natural or man-made disaster. Here, in this guide, we explain all about home insurance – what it is, types, why you need one, how to choose the right home insurance policy, FAQs and more.

What is Home Insurance?

Home is where the heart is, and a home insurance policy helps you protect it.

Home insurance is known by several names – house insurance, property insurance, building insurance, or homeowners insurance. This is an insurance policy that helps to protect your home from damage due to insured events (defined events) mentioned in your policy document. Some of the common insured events include fire, floods, storms, earthquakes, etc.

If your home gets damaged due to a calamity mentioned in the policy document, then the insurance company will provide you with a lump-sum amount to cover the cost of repairing or replacing the damages in your home.

Additionally, the home insurance policy also protects you from legal liabilities if a visitor gets injured while visiting your home.

Situations in which Home Insurance offers Protection

There are plenty of situations and scenarios where home insurance protects you. Here are some of the top situations where it can help you:

1. Repairing or Rebuilding a Home After a Disaster

Standard home insurance cover offers you lump-sum payments for repairing or rebuilding your home after natural or man-made calamities like lightning, flooding, storms, cyclones, fire, riots and more.

The sum assured depends on the premium and the plan you have chosen. The sum assured is calculated based on several factors like:

  • Reinstatement value – the cost for construction of the house. This does not include the cost of the land.
  • Agreed value – the total cost of the house, agreed by the insured and insurer.
  • Indemnity value – this is the cost for construction minus the depreciated value.

2. Replacing or Repairing Damaged Appliances

When you take comprehensive home insurance, the policy also protects your home and its contents from electrical/mechanical damages, burglary, and theft. To be available for this benefit, you have to declare the value of all insured items in your house at the time of application. You have to keep a copy of all invoices and bills of the items insured.

Depending on the premium and the plan you have chosen, the sum insured will be calculated after factoring in depreciation. The insurer may reimburse the costs of getting replacement items for the damaged goods or provide you with a lump-sum for repair costs.

3. Temporary Relocation

Sometimes, especially during natural calamities, your home may get severely damaged. In such cases, you and your family members have to look for temporary accommodations until your home can be repaired or rebuilt.

The insurer covers the cost of your temporary accommodation like rent until your home gets ready for re-occupation.

4. Liability Protection

Home insurance policies offer liability protection. This means, if a visitor to your property gets injured on your property, you are liable to pay compensation to the injured visitor. With home insurance, the insurer takes care of the compensation for liabilities to third parties due to accidents at your property.

4. Higher Chances of Home Loan Approval

If you are looking to avail a home loan for the construction of your dream property, then your lender is more likely to approve your home loan application, if you have insured your home. Home insurance acts as a financial safety net to the lender, providing them with financial stability in case of an unexpected loss/damage to your property.

6. Loss of Rent

This is an add-on cover that you can purchase along with your standard home insurance plan. If your property becomes uninhabitable due to a repair or damage, the insurer provides you compensation for the income loss due to loss of rent. The loss of rent cover is provided until your home is rebuilt or repaired.

7. Personal Accidents Coverage

Some home insurance policies also offer coverage for accidents and disabilities. If you suffer from an accident at the insured property, you can avail personal accident insurance coverage from the insurer.

Home Insurance

Who should buy home insurance?

There is a common myth that home insurance is only for homeowners. Contrary to that, home insurance policies are meant for all – irrespective of whether you own a home or live in a rented home.

Let us explain the reason for this using an example. Consider the case of Rakesh, who moved into a rented high-rise apartment in Gurgaon, just a few months ago. He furnished his home with several high-end appliances and spent a few lakhs on the interiors. A few weeks ago, his apartment building was engulfed in a fire accident, making all inmates lose their appliances and other materials inside the home.

Thankfully, Rakesh had taken a home insurance policy for his rented apartment. According to the plan, the insurer reimbursed the costs of all damaged appliances, furnishings and interiors. Rakesh was able to relocate his family to another apartment building and furnish the new place with the compensation amount. Thus, his home insurance policy protected him from financial stresses during the emergency.

As you can see, home insurance offers protection and peace of mind to both landlords and tenants. Hence, home insurance is an absolute must for all.

Top 5 Advantages of Purchasing Home Insurance

There is no denying the fact that home insurance offers significant financial protection to all homeowners. Here are the top five advantages that you can enjoy when you purchase home insurance:

  • Comprehensive coverage to your possessions inside the home as well as the structure of the property.
  • Secure your most expensive asset – your home – from all-natural and man-made calamities.
  • The premium of a home insurance policy is lower when compared to other insurance plans.
  • Timely payouts of the compensation and large sum assured, helps you and your family, relocate or repair and rebuild your home quickly, after a calamity. This helps you get back to your daily lives after an emergency.
  • Above all, it offers you immense peace of mind. You can reduce your tension and stress, knowing that your home is protected at all times.

Types of Home Insurance Policies in India

Insurance companies in India offer a broad range of home insurance policies to suit the varying needs of different customers. As a customer, you must understand the different types of home insurance policies and choose the right one that meets your specific requirements.

Here, in this section, you can find a list of the top different types of home insurance policies in India and their benefits.

1. Standard Fire and Specials Perils Policy

This is the basic home insurance policy and is offered by several general insurance providers in India. As the name of the policy implies, it provides coverage for your home against fire and other special perils.

This plan can be purchased by homeowners and landlords to protect the structure of their property. Additionally, tenants can also purchase this plan to protect household goods and other possessions.

The sum assured for this policy is calculated based on the cost of reconstruction of the building. It does not include the cost of the land.

Here’s what’s generally included in the Standard Fire and Special Perils Policy:

  • Natural calamities like fire, lightning, earthquakes, floods, cyclones, storms, forest fires, bush fires, volcanic eruptions, etc.
  • Damages to your home due to an explosion and other man-made disasters including riots, communal clashes, strikes, malicious intent, etc.
  • Damages caused due to impact with vehicles in a road accident. However, remember that damages caused to your home by your own vehicle are not included in this cover.
  • Damages to your property caused by overflowing water tanks, bursting of plumbing pipes, etc.
  • Damages due to landslides and rockslides
  • Damages due to missile testing operational accidents
  • Damages caused by water leakages due to sprinkler explosions, overhead tank bursting, etc.

This is the standard home insurance plan, and when people refer to home insurance, they are generally referring to the Standard Fire and Special Perils policy.

2. Home Structure Insurance

This is also known as building insurance. It protects the structure of your home from all types of risks and dangers. Additionally, this plan also offers coverage to permanent fixtures inside the home like – kitchen and bathroom fittings, ceiling and roof, etc.

If your home has an outdoor structure like a garage, motor shed, gardening shed, etc., then the home structure insurance also extends to these structures.

3. Public Liability Coverage

If a guest, visitor, or any third-person experiences accidents or other damages inside your home, then this insurance policy offers third-party liability coverage.

4. Personal Accident

This is an extended home insurance plan that not only protects your home but also offers coverage for you and your family members. If you or your family members meet with an accident in the insured home, the insurer pays compensation for death or permanent disability.

Additionally, some home insurance policies also offer personal accident coverage for accidents that occur anywhere in the world, and not just within the insured home.

5. Thefts and Burglary Insurance

This insurance cover, as the name implies, offers compensation for the valuable contents inside your home, if they are stolen or damaged due to theft or burglary.

6. Contents Insurance

This home insurance plan offers protection for your home, as well as the contents inside it. It’s true that we spend as much money on furnishing the home with tastefully decorated interiors and other home furnishings as on building the home.

Hence, you must protect these precious commodities on which you have spent plenty of money. With Contents Insurance, you protect the goods inside your home from losses and damages due to theft and other natural calamities.

Generally, contents insurance covers jewellery, household appliances like TV, washing machine, refrigerator, documents and other goods in the home. This home insurance policy helps you restore your home and its interiors after it was damaged due to a calamity or an accident.

7. Tenants Insurance

As the name implies, this home insurance policy is exclusively for tenants. Tenants need not pay a premium for protecting the building structure. They can just focus on protecting the contents and goods inside the home. The tenant's insurance helps renters protect their household appliances and other goods at low premiums.

8. Landlord’s Insurance

The landlord’s insurance policy is designed specifically to meet the requirements of landlords who rent their property out to tenants. This policy covers loss of rent, third-party liability, as well as offering coverage for the overall structure of the building.

However, the landlord’s insurance does not cover loss of property due to war, wear and tear, wilful destruction and loss to property that remains unoccupied over a certain period.

Home Insurance Policies: Inclusions and Exclusions

A good home insurance plan is one that offers protection to your house against unforeseen events, which includes both natural and man-made calamities. With that said, different insurance policies have varying rules on what’s included and what’s not included in a home insurance plan. Make sure to go through your policy document carefully, to understand the different terms and conditions, so that you avoid any conflicts during claims.

Inclusions: What’s covered under a home insurance plan?

  • Damages due to fire, riots, and strikes
  • Fire outbreaks and structural damages due to lightning
  • Damages incurred due to natural calamities like hurricanes, storms, floods, cyclones, earthquakes, tsunamis, etc.
  • Damages due to landslides and rockslides
  • Damages due to aircraft, missile strikes and acts of terrorism
  • Damages due to burglary and theft (if you have purchased theft protection add-on cover)

Exclusions: What is not covered under a home insurance policy?

  • Damage or loss to the property due to wear and tear depreciation
  • Damage or loss due to war, nuclear attacks, invasion, acts of foreign enemies, etc.
  • Damage or loss due to running an electric equipment at excessive pressure or in the wrong way
  • Loss of cash at home due to theft or burglary
  • Damage or loss due to negligent use of household equipment
  • Damages to a property that is still under construction
  • Damages to a property that remains unoccupied over a specific period (say 90 days continuously, etc.)
  • Damages to items like heirloom jewellery, antiques that have not been declared in the policy proposal form.
  • Damages due to animals that you keep at home
  • Damages incurred by running a home business from your property

Make sure to go through the policy inclusions and exclusions carefully, to understand all that’s included under the cover.

How is the insured amount and premium calculated for home insurance?

For home insurance, the sum insured and the premium amount depends on several factors like the area of the insured property (sq feet), the cost of construction in the zone (per square feet), the location of the home, age of the property and more.

Since there are several factors to consider apart from the size of the home, the insured sum for two houses of the same size will be different. Let’s explain this with an illustration. For example, consider House A of 1200 sq. ft and is constructed in a prime location in Bengaluru. The cost of construction of the house usually ranges from 2 crores upwards. Now, consider another house, House B constructed in the outskirts of Hosur, a Tier-II city a few km away from Bengaluru. The cost of the house in this location ranges from Rs. 30 lakhs to Rs.50 lakhs.

As you can see, apart from the property size, other factors like construction costs, location, all play an equal role in determining the cost of the property. This means no two houses will be eligible for the same insurance amount as there are several factors at play.

Additionally, you have to remember that the sum assured is equal to the cost required to rebuild the home and is not the market value of the property before damages. On the other hand, the sum assured for the contents and goods inside the house is calculated after deducting the depreciation amount from the market value.

Here are the top factors that determine your home insurance premium costs and the sum insured.

Required Coverage

The more the coverage you choose, the higher the premium to be paid. While purchasing home insurance plans, you would come across different plans with varying coverage. Some plans offer coverage only for the structure of the house, while others offer coverage for the structure as well as the contents inside the house. Depending on the coverage you choose, the premium for your plan varies.

While choosing home insurance plans, if you are looking for coverage for your rented property, it makes sense to insure only the contents inside the house. Leave the insurance of the structure to the landlord. This reduces the premium you have to pay as a tenant.

Cost of Construction

Simply put, the premium and the sum insured for a small home is lower than the premium and sum insured for a bigger home in the same locality. Bigger the size of the property, higher will be the premium amount you have to pay to purchase home insurance.

These are the three main factors that determine premium costs for your home insurance policy. If you would like to know the exact premium you will have to pay, get in touch with your preferred insurer to get a quotation. Alternatively, you can make use of an online home insurance premium calculator to get an approximate cost.

Smart Ways to Lower your Home Insurance Premium

You can reduce your home insurance burdens by following these smart strategies.

Increase Homeowners Insurance Deductible

The deductible is the amount of risk you agree to bear on your own before the insurer starts paying for the claim. The deductible is the amount you have to pay out of pocket for all insurance claims. When you raise the deductible, you can reduce your premiums significantly.

Let’s say; you have insured your home for a sum of Rs. 10 lakhs. The standard voluntary deductible is Rs. 10,000. By increasing this deductible to say Rs. 1 lakhs, you can reduce your premium amount by 25% or more.

Insure only Commodities that are Expensive and Difficult to Replace

Over the years, we accumulate plenty of things around the house. While insuring your home, it does not make sense to insure every single gadget in the home.

For instance, you may have two televisions at home. The one in the living room is a brand new OLED TV that costs Rs. 1 lakh while the second television in the bedroom is an old CRT TV. Though the second TV is working well, it doesn’t make sense to insure it, since it has gone huge depreciation over the years.

Make sure to make an inventory of products to be insured and only insure the gadgets that are really worth it.

Take more than one Insurance Plan from the Insurer

Let’s say, you have taken a personal accident insurance policy or car insurance policy from Insurer A. Then, taking your home insurance plan from the same insurer makes you eligible for discounts on the premium. The insurer is likely to reward your loyalty by offering discounts on the premium.

Invest in the Safety of your Home

Just like car insurance, insurers are likely to offer you huge discounts when you have installed safety devices at home. When you invest in the safety of your home by installing fire safety alarms, CCTV monitoring, your insurer’s risks get reduced. This way, they are likely to award you with discounts on premiums.

Don’t pay for Coverage that you Don’t Require

While purchasing home insurance, it makes no sense to pay for extra covers for risks that you are not likely to encounter. For instance, you live in a zone that is not prone to earthquakes or volcanic explosions. Then, you can opt-out of the earthquake and volcanic explosions coverage, thereby reducing your premium. Similarly, if you don’t store precious jewellery at home, then you don’t have to opt for jewellery coverage.

Make sure to go through the coverage features provided by your policy to pick the right ones that you need. At the same time, make sure that you don’t skip essential coverage like fire, cyclone, or flood insurance.

Finally, Shop Around

Make sure to spend some time researching the different home insurance policies available on the market. Compare home insurance plans offered by different insurers, the features, coverage, and premium costs, to help you select the right plan at the best prices.

Top 10 Home Insurance Companies in India

Today, homeowners have plenty of choices when it comes to home insurance plans. You can choose a plan from any one of the several home insurers in India. Make sure to evaluate the features and benefits of the plans offered by different home insurers and choose the right one that meets your specific requirements.

Here, we list some of the top home insurance companies in India, along with the different home insurance plans offered by them.

1. Bharti AXA Home Insurance

Bharti AXA offers the Smart Plan Householder’s Package Policy that offers extended coverage to homeowners. The plan consists of various subsections to meet the requirements of different homeowners.

Some of the major coverage offered by this plan includes:

  • Section I – Building, Fittings, Fixtures, and Renovation
  • Section II – Home contents, valuables, appliances, documents, title deeds, removal of household contents to a new property
  • Section III – Personal accident
  • Section IV – Loss of rent
  • Section V – Additional rent for an alternate accommodation
  • Section VI – Pedigree pet
  • Section VII – Baggage
  • Section VII – Legal liabilities

2. ICICI Lombard Home Insurance

ICICI Lombard offers a comprehensive home insurance plan that offers coverage for structural damage as well as damage to contents. Countrywide service network, doorstep delivery of the policy, 24 x 7 call centre and comprehensive coverage are the salient highlights of home insurance plan from ICICI Lombard.

3. Chola MS Home Insurance

Cholamandalam insurance company offers two home insurance plans:

  • Chola MS Total Home Protect – This plan offers three-fold protection: protection for the structure of the home, protection for the contents inside the house, and protection for your family members during a disaster.
  • Chola MS Long Term Dwellings Plan – This plan is offered exclusively to flats and apartments in high-rises used exclusively for residential purposes.

Hassle-free claims process, complete flexibility, and affordable premiums are some of the reasons to choose a home insurance policy from Cholamandalam.

4. IFFCO Tokio Home Insurance

IFFCO Tokio offers three home insurance plans:

  • All in one Home Protector Policy – This plan has twelve subsections, out of which at least three has to be chosen by the policyholder.
  • Home Suvidha Policy – This plan offers protection to the home during natural calamities as well as due to man-made calamities like thefts and burglaries.
  • Home Family Protector Policy – This plan offers protection to your home as well as your family members during an emergency.

5. HDFC ERGO Home Insurance

HDFC ERGO offers three different home insurance plans to meet the requirements of different individuals.

  • Home insurance for tenants
  • Home insurance for owners
  • Housing society insurance

HDFC ERGO is one of the leading general insurance companies in India and has sold more than one crore policies. 24 x 7 customer support, 16 years of experience in the insurance industry in India, transparent and hassle-free claim settlements are some of the reasons to choose HDFC Ergo.

6. Universal Sompo Home Insurance

Sampoorna Griha Suraksha is the home insurance policy from Universal Sompo. It’s a comprehensive house owner’s package policy that offers extended coverage. This is a package policy offering you all-in-one protection. Thereby you need not purchase add-on covers to increase your overall coverage.

7. Shriram General Home Insurance

Shriram General Insurance Company offers Dwelling Coverage, a home insurance plan with plenty of benefits. This plan not only covers structural damage to your home but also offers coverage for other structures that are not directly attached to your home like an outhouse, guest house, gardening shed, etc.

8. Reliance Home Insurance

Reliance General Insurance Company is one of the upcoming insurance providers in India. The company offers two different home insurance plans to cater to the requirements of different individuals. They are:

  • Home Insurance – Structure Protection
  • Home Insurance – Content Protection

9. Royal Sundaram Home Insurance

Royal Sundaram offers affordable home insurance packages to meet the requirements of homeowners in India. The Gruh Suraksha Home Insurance plan from Royal Sundaram has two major categories:

  • Building Insurance of up to Rs. 5 crores without any prior inspection
  • Household Articles coverage of up to Rs. 1.5 crores for your household possessions

You can choose either of these plans or both for comprehensive coverage.

10. Future Generali Home Insurance

Home Secure is the home insurance plan from Future Generali. It’s an all-inclusive protection plan offering coverage for the structure of the building, the contents inside your home, and your family members during a crisis. Pan-India support network, affordable premium, in-house claims are some of the highlights of this plan.

How to file a claim under your home insurance policy?

Understanding home insurance claims will help you reach out to your insurer quickly during an emergency. The claim process is a crucial element in determining the effectiveness of the policy. Look for home insurance plans that offer easy, hassle-free claim application and claims settlements.

Make sure to consider the CSR (Claim Settlement Ratio) of the insurer while choosing a home insurance policy. Higher the CSR, better are the chances of your claims getting approved by the insurer. You can find the current CSR numbers of different insurers by checking the official IRDAI (Insurance Regulatory and Development Authority of India) website.

Here are a few points to keep in mind while filing a claim:

  • Make sure to evaluate the degree of damage sustained by your home. Get an estimate from a local builder/constructor as to how much it would cost to repair/rebuild the property.
  • If your house has been broken into, then the first step is to file an FIR (First Information Report) at your local police station.
  • Additionally, make sure to record the damages incurred by your home using photographs. After an unforeseen event, walk around your home taking videos/photographs of the damages.
  • Do not toss away any broken or damaged items inside the home. All this is needed as proof of your claims.
  • While calculating the costs of repair/rebuilding, make sure to consider all costs including costs of labour, costs of replacement, and transportation costs (if any). Also, add the costs of temporary alternative accommodations.
  • Get in touch with your insurer before you make any repairs to your home.
  • Different insurers have varying periods for filing a claim. Make sure to know the time limit required by your insurer for filing the claim and start the claims process within this time limit.
  • Once you have contacted your insurer and started claims submission, you can make temporary or immediate repairs. Keep a copy of all the receipts and bills for the repairs you make to your home. Your insurer will require these bills to determine the sum assured.

Filling up the Claim Form

Once you have notified the insurer about the damages, the next step is to fill up the claim form. Most insurers have a copy of the claim form on their website. You can download it or else you can visit the nearest branch of your insurer to get a copy of the claim form.

While filling the claim form, make sure that you do not miss any details and also double-check if you are providing the correct information. Remember that claim applications are time-bound, so try to submit the claim form as early as possible.

What happens next?

Once you have submitted the claim form, the insurer starts processing the claim. The insurance company sends an adjuster or surveyor to inspect the damages incurred by your home. The surveyor submits a report detailing the list of damages. Based on this report, the insurer decides the compensation amount.

Once the insurance company has processed the claim, the next step is disbursal of the claim amount. The company pays you with a lump sum that you can use toward the restoration and repairing of your home.

If you have any questions about the claim process or need any help, get in touch with the claims department of your insurer.

Step-by-step guide for home insurance claims:

  • Inform the insurance company regarding the damage/losses to your home by calling on their 24 x 7 toll-free helpline number.
  • You have to provide all relevant and necessary information to the customer service personnel. Make sure you have your policy number in hand.
  • The customer service personnel directs you to file the claim.
  • Download the claim form and fill up all the details. Provide the required supporting documents.
  • Submit the claims form.
  • The insurer sends a team of surveyors to evaluate the damages.
  • You may have to provide additional documents like receipts, etc.
  • The surveyor submits the FSR (Final Survey Report) to the insurer.
  • Once the insurer validates your claim request, the claims team approves the sum assured.
  • The compensation amount is transferred to your bank account or issued to you via cheques.

Difference Between Housing Society Insurance and Personal Home Insurance

As the name implies, housing society insurance is a common insurance policy taken by all members who reside in a housing society. Personal home insurance, on the other hand, is insurance taken by individual homeowners or tenants.

Let’s explain the difference between these two insurance products using an example. Consider the case of Monish, who lives in a housing society with his wife and two children. He knew that his residential complex came with housing society insurance, so he did not purchase a personal home insurance cover. He believed that his home was protected sufficiently under housing society insurance.

Sadly, his residential complex was ravaged by cyclones and floods. Floodwater entered his home, making Monish and his family lose their precious personal possessions like – TV, washing machine, computer, laptop, a couple of smartphones, refrigerator and other furniture in the house. However, the building’s structure was not damaged due to the flood.

When Monish tried to reclaim the cost of damages under the housing society insurance, he was in for a shock. Only then he learned that the housing society insurance offers only a minimal cover for structural damage and doesn’t offer any compensation for interior damages to his home and his family’s personal possessions.

Monish’s story highlights the challenges one faces when they rely only on housing society insurance. As you can see, you need personal home insurance to offer your extensive home protection.

One of the major drawbacks of housing society insurance is that it offers insufficient coverage. Here’s what you can do to overcome this drawback.

  • Check the housing society insurance policy documents, and understand the rules and conditions, to see if it’s sufficient for you.
  • If not, you can approach the managers of your housing society to see if it is possible to enhance the coverage.
  • Alternatively, you can purchase a personal home insurance policy as top-up cover to enhance the coverage to your home and also include coverage for your personal possessions.

While housing society insurance is a good idea, it usually doesn’t offer adequate coverage. Also, the coverage is not under the control of each individual member. Hence, topping-up this policy with a personal insurance cover is a good idea.

What is high-value home insurance? Is it worth it?

As the name implies, high-value home insurance is a special type of home insurance that is offered to properties whose values are higher than the average. Generally, high-value home insurance covers not just the cost of rebuilding the structure of the home but also includes coverage for personal property, interior fittings, and fixtures, bank cards of the residents, contents, and possessions inside the home, along with other liabilities.

Who is it for?

High-Value home insurance works the best for people who own properties that cost significantly more than other similar properties in the area. A high-value home could be a heritage property or fitted with antiques, expensive art pieces, and more.

Let’s say you own a sprawling villa right in the city centre in Mumbai. Your home has over six bedrooms fitted with premium furnishings and valuable art pieces. If such a property is damaged in a natural calamity, then regular home insurance will not be enough to cover all the costs. This is where - a high-value home insurance comes to play.

What does a high-value home insurance cover?

A high-value home insurance plan offers the following coverage:

  • Comprehensive coverage for the insured property
  • Replacement costs for the structure of the building and outer structures
  • Damages caused due to backup/clogging of drains and sewers
  • Damages incurred due to breakage of property, vandalism, etc.
  • Compensation costs for losses to personal possessions inside the home
  • Theft or burglary at the property when the homeowner is away
  • Cover for all precious articles inside the home include jewellery, silverware, antiques, art, expensive electronic gadgets and more
  • Credit card coverage

While these are the list of general coverage offered by high-value insurance plans, make sure to check the policy wordings to get a clear idea of all the coverage included in your plan.

Benefits of High-Value Home Insurance

  • Extensive coverage
  • Coverage for identity theft
  • Home emergency cover that offers immediate assistance in case of a disaster
  • Policyholders can avail specialized services like access to legal advisors, furniture restorers, interior renovators and more
  • Most insurers offer a 24-hour claims hotline exclusively for high-value home insurance policyholders

What’s not included in High-Value Home Insurance?

Here is a list of the common exclusions of this policy:

  • Costs for alternate temporary accommodation is only offered for periods lesser than one year
  • Damages incurred by your home due to war, terrorist attacks, and nuclear attacks
  • Costs for home upgrades
  • The loss to metered gas connections
  • Damages to inherited personal property
  • Damages due to mechanical breakdowns and electrical faults
  • Damages due to faulty workmanship or misuse/mishandling of gadgets
  • Losses due to regular wear and tear, gradual deterioration, rust, warping, etc.

A high-value home insurance policy is an absolute must for expensive and exclusive properties. It helps you bounce back to normalcy after an unforeseen event.

Home Insurance: Myths

Your home is one of the biggest investments you will make in your life. It’s more than a building. It’s where you and your family build your life and future. Hence, you must take the right steps to ensure that it stays protected at all times.

A home insurance policy offers you the required financial coverage to protect your home from any unfortunate and unexpected calamities. However, not many people are aware of what home insurance is, how it can protect you, and how to choose the right policy. Here are the top myths of home insurance and the truth behind it.

Myth #1: My home loan insurance will protect me from all unforeseen events.

In India, when you take a home loan, you are required to purchase home loan insurance. However, what many people don’t know is that home loan insurance offers coverage that is beneficial for the lender (your bank) and not the borrower (you).

The basic idea of home loan insurance is that it will protect your lender if you fail to pay the home loan EMIs. It doesn’t offer financial coverage to your home if something were to happen to it unexpectedly.

What you need is homeowners insurance to protect your home from unforeseen events.

Myth #2: It is enough if I take a basic home insurance plan.

In order to reduce the premiums, several people end up choosing the most basic home insurance plan. However, you have to remember that basic home insurance plans do not offer extended coverage like – coverage for contents inside the home, coverage for damages due to floods, etc.

Make sure to go through the policy document carefully, understand what’s covered and what’s not included, to pick the right home insurance plan that works for you.

Myth #3: I am a tenant. I don’t need home insurance.

This is one of the biggest myths of home insurance in India. Even if you are a tenant, a home insurance plan will help you cover the costs of the contents of your home like – your television, refrigerator, washing machine, interiors, furnishings and more.

Additionally, when you change homes, you can simply update the address of your new rented place and continue enjoying the same coverage.

Myth #4: Home insurance covers only the structure and contents of the property.

Very often, homeowners falsely assume that home insurance plans cover only the structure and the contents of the property. While these are the basic coverage offered by most home insurance plans, you can further extend the coverage by choosing add-on covers.

For instance, choosing the loss of rent add-on cover helps you recover the rent loss if your home is damaged due to an accident. Other add-on covers include:

  • ATM withdrawal robbery cover
  • Temporary resettlement cover
  • Lost wallet cover
  • Public liability cover
  • Dog insurance cover
  • Key and lock replacement cover
  • Employee’s compensation cover
  • And more

Myth #5: The Claim Settlement process for home insurance is time-consuming and complicated.

Wrong. If you have submitted the required KYC documents along with the policy proposal form, then you can avail claims easily, without any hassles. Additionally, today, several insurers offer you the option of applying for claims online, further simplifying the process.

Myth #6: I will have to pay higher premiums, every time I file a claim.

This is partly true. If you file multiple claims in a year, then there is a chance that premium costs will increase. On the other hand, if you file only one claim in a policy year, then your premium amount will not increase.

Hence, it’s recommended that you settle small claims out of pocket and file only the bigger claims.

Myth #7: The coverage amount offered by my home insurance plan should match my home’s market value.

Most homeowners make this wrong move. When you choose home insurance coverage equal to your property’s market value, then you are likely to pay higher premiums. Instead, opt for coverage that is equal to the cost of rebuilding your property.

Myth #8: My policy covers termite damage.

Most home insurance plans do not offer coverage for termite infestation. This is because insurers provide you with compensation only for natural and man-made calamities. A termite infestation is not considered as a calamity, but due to lack of maintenance.

So, if you are looking to get coverage for termite infestation, look for policies that offer this cover. On the other hand, you can hire a pest control company to check if there are any termites in the building and eradicate the issue before it damages the structure of your home.

Home Insurance: FAQs

1. How long does it take for the insurer to disburse the compensation amount?

Insurance claims are time-bound. Hence, it’s highly recommended that you submit a claim as early as possible. Once you have submitted the claim form, the insurer dispatches a surveyor for your case within 48 hours.

The surveyor after analysing the damages to your property submits the FSR (Final Survey Report) to the insurer. The report, along with other supporting documents, is sent to the claims department of the insurer.

The claims department reviews the report and processes your claim within seven working days. Before the insurer transfer you the compensation amount, the team sends an intimation letter notifying you of the amount, you have been approved.

2. What claims are not approved by the insurer?

While most claims are approved, claims that arise due to any one of the following reasons are not approved:

  • Damages to your property due to war and other related dangers
  • Damages to your property due to electrical fluctuations
  • Damages due to water seepage
  • Loss of cash, mobiles, laptops, gold coins, works of art stored in your home
  • Damages due to willful destruction of property
  • Damages that occur when your home is left unoccupied for over a period of time (usually 30 days or more at a stretch)

3. How is the loss amount calculated?

Different insurers use various rules and guidelines to calculate the compensation amount. Here is an overview of how the loss amount is calculated.

GuidelinesStructure Insurance Claim AmountContent Insurance Claim Amount
Definition of lossThe cost required to rebuild the structure Cost required to purchase the same or similar articles
Assessment is based onConstruction costThe market value of the item(s)
Not includedThe price of the landThe current market price of the damaged/lost item
Example

Home area: 1000 sq ft

Rate of construction: Rs. 500 per sq ft

Compensation amount: Rs 5,00,000

Cost of insured articles: Rs. 1 lakh at the time of purchase

Sum Insured: Current market value of the products minus depreciation

4. I have lost all my important documents in the calamity. Will I be able to get a claim? What should I do if I don’t have the required documents?

Even if you don’t have copies of the original documents, you can still submit a claim. The insurer sends a surveyor to your property to assess the damage. The surveyor submits the FSR, based on which the sum insured is dispensed.

You may have to provide additional documents like:

  • FIR (First Information Report) filed at the local police station
  • Rent agreement (if applicable)
  • Original invoices along with an estimate of the cost of repairs
  • Fire brigade report
  • Transportation bills
  • Bills for a temporary relocation and more

5. If I insure for a higher value, will I be eligible for a higher claim amount?

No. The claim amount is based on the reinstatement value of the property (the cost of rebuilding it at current market value). This value is determined based on the FSR. The compensation paid will be determined by the insurer using the FSR and not on whether you have insured the property for a higher value or not.

If you choose a higher insurance amount, the premium payments will be more. So, make sure to choose the correct value, and you will continue to receive the correct insurance amount based on prevailing market values.

6. Are items like jewellery, household appliances, etc. covered under the Standard Fire and Special Perils policy?

No. The Standard Fire and Special Perils policy offers compensation only for the reinstatement value (the cost of rebuilding the home and structural damage). It does not provide compensation for loss of contents inside the home. If you require protection for the contents, then you can choose add-on covers to your standard policy or opt for other types of home insurance policies that offer extended coverage.

7. I have already taken a home insurance policy, and my bank which finances my home loan requires me to take a home loan insurance policy. In this case, what happens during a claim?

If you are to submit a claim for both insurance policies, both insurers offer the respective sum insured under the two policies.

8. I recently purchased an old bungalow. The home is a bit worn down. Will an insurance company provide insurance for this property?

Yes, insurance companies provide home insurance for all properties irrespective of the age of the property. However, if the property is too old and dilapidated that is under the risk of collapse anytime, the insurance company may refuse to insure it.

9. My wife recently started conducting home tuition classes in a part of our house. Is my home insurance still valid?

No. Home insurance becomes invalid when you use the home for any other commercial purpose.

10. How is the value of the structure calculated?

Under a home insurance policy, the value of your home’s structure is calculated based on the reconstruction cost and not on the market value. The sum provided by the insurer during a claim is the reconstruction cost.

Let’s say, your home has a total built-up area of 1200 sq. ft. The current cost of construction is Rs. 1000 per sq. ft. Then the sum insured for your home’s structure is Rs. 12,00,000.

11. What happens if I have to sell the property during the home insurance period?

You can submit a claim for cancellation of your home insurance policy. In this case, the premium amount is deducted accordingly, and the rest is refunded to you, and your home insurance policy becomes null.

12. What are the different modes I can use to pay my home insurance premiums?

Today, most insurers offer online portals for easy payment of home insurance. You can pay your premiums using your credit/debit card, internet banking account, digital mobile wallets, and more. Alternatively, you can also issue a cheque for premium payments to the insurer.

13. I have insured my jewellery under my home insurance plan. What happens if I wear my jewellery to a party and I am robbed on the way there? Will my home insurance plan cover this?

No. Your home insurance policy covers your jewellery and other home contents for burglaries and thefts taking place inside your home. Any theft that occurs outside the home is not covered under the home insurance policy.

14. I live in a housing society that is insured by the society. Do I need to take an additional home insurance policy?

Generally, housing society home insurance plans offer limited cover. It offers coverage only for the structure of the home and not the contents inside your home. If you require cover for the contents inside your home, then you have to take contents home insurance policy.

15. What is the policy period for home insurance?

Generally, home insurance plans are available for a period of one year. However, some insurers also offer longer tenures ranging from three to five years.

16. If I choose a multi-year policy, should I pay the premium every year or for the entire tenure?

When you choose a multi-year policy, you have to pay the premium in advance for the entire tenure. One of the biggest advantages of multi-year home insurance policy is that you don’t have to pay premiums every year.

17 . What are the eligibility criteria to purchase a home insurance policy?

All individuals who are owners or occupants of a property are eligible to purchase home insurance plans. However, multi-year home insurance plans are only available to homeowners and tenants.

If you are purchasing housing society insurance, then an authorized member of the society’s managing committee can purchase the plan for the entire society building and other common utilities.

18. I met with an accident inside my home and broke my ankle. Will my home insurance policy pay for the medical expenses?

No. Home insurance medical coverage is only for third-party liabilities and not for the members of the household. If you require coverage for accidents, then you need to choose a personal accident cover.

19. Does home insurance cover damage to the structure due to water and mould?

It all depends on the type of damage. If the damages are due to flood water, water seepage from groundwater/municipal water, sewer or drain backups, then your insurer will provide you with compensation. On the other hand, if the damages are due to irregular maintenance, then your insurer is not likely to provide you compensation.

The insurer determines the worthiness of the claim on a case by case basis.

20. If losses occur due to a fire outbreak in the neighbourhood or garden, then will it be covered under the home insurance policy?

Yes, the spread of fire to insured property is covered under home insurance. However, your insurer approves the claim only after verifying that the act was not deliberate.

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