Misconceptions about home insurance you should know about

The need for home insurance is felt only during the time of need. It’s when we read about earthquakes and floods we talk about the importance of having home insurance. Having said that, it is important to buy a home insurance to protect your house from unforeseen tragedies.

Naval Goel, CEO & Founder of PolicyX.com, says, “In India, lack of awareness and complex procedures of investing in a home insurance policy is the reason behind the low penetration of home insurance. Lack of awareness is still at the top as people don’t know about the importance of having the same for a secure life. They still don’t consider the same as important as having health insurance. ”

First things first. What is home insurance? Home insurance covers three kinds of risks. The basic policy protects the building against fire and allied perils such as earthquakes and floods. The second type of risk coverage protects the contents of your house from both natural and man-made calamities, including burglary. There are policies that also cover fine arts and contents kept with children living outside for the purpose of the study. The third covers peripheral risks such as baggage, increased living expenses, among other things.

So, let’s move into a few misconceptions about home insurance, which generally stop people from taking the policy.

 Act of God is not covered

There is a belief that home insurance does not cover Acts of God. The fact is Section 1 of the policy generally covers fire and other allied perils such as earthquake floods.

Home insurance is expensive

Home insurance is not at all costly given it only pays you the cost of construction and not the cost of the land. Premium amount is generally 0.2-0.3% of the sum insured. Consider this: for a sum insured of Rs 40 lakh for structure and Rs 10 lakh for contents, insurance will be around Rs 7,000 to 10,000 including gold and jewellery add-on.

Claim settlement is complicated

The claim process is not difficult if you are aware in advance of the few steps it takes. In case of any eventuality, the insured needs to intimate the claim after which the insurer appoints a surveyor to assess the losses. The insurer asks KYC documents to identify your but usually in case of large-scale eventualities insurers relax the settlement procedures. It is always good to keep your policy number handy so that claim process can be quickly started.

Home insurance with home loan is sufficient
Home loan cover generally covers the building structure only without any coverage for contents of the house. It is important to buy a comprehensive home insurance product, as it covers both structure and contents.

Owner only can buy home insurance policy

It is not just owners, tenants also can buy a home insurance policy for protecting the contents of home. In case of any change in the address you can get the policy endorsed for change of address.

It is advisable to go for a comprehensive home insurance cover and read the policy documents to understand what all it covers.