How to adequately insurance your home
18 June, 2013
It took Shivani who returned from a holiday trip with her entire family, a shock of her life to know that some miscreants have broken the house and have took away many of the home contents/ appliances along with jewellery and valuables. Theft had also resulted in damage to the structure of the house. As the home was almost empty , she required immediately a hefty amount running into lakhs to buy all required furtniture/ appliances and to repair the house to ensure safety.
While this is story of Shivani, Amarnath had a different experience. Electricity leak in an appliance ended up in complete charring of all furniture, fixtures, appliances in his house leaving him no choice other than to immediately drain the savings/ borrow to buy everything back along with repairing the house.
Just like Shivani & Amarnath many of us take the security of our house for granted. And those of us, who do bother to get it insured, don’t buy enough coverage. It is strange how we overlook insuring the most valuable asset òur home & our precious contents.The following tips will let you know how you can insure your haven in the most sufficient manner –
If you thought that the market value of your house is what will be insured with a home insurance, then you were highly mistaken. A home cover only covers the value of the structure or the cost of reconstructing it. It covers the cost in case of natural and man-made perils as mentioned in the policy you sign at the time of purchasing. So if you have a house of 1500 sq.ft and the cost of construction for it is Rs.1600 per sq.ft, then the insurable value of the house is Rs.24,00,000.
In your dream home if you have expensive interior decoration , the same may also be covered as part of your home building.
As there is a general tendency to change the household articles/furniture / appliances over a period of time, it would be ideal to go for an annual cover while you may opt for long term insurance for your home building.
You can get the total cost of your home insurance by adding the cost for the reconstruction of the structure of your house in case of fire/ other perils, damage to content due to burglary and theft or other perils.
A home insurance policy generally covers home contents like household appliances and electronics, jewellery and other essentials like clothing, furniture etc. So when you avail a policy to cover the content of your house, calculate the cost of all the items covered by the plan to get an appropriate sum insured. You need to keep in mind that the policy will take the depreciation amount under consideration at the time of claim.
When it comes to insuring your jewellery, most of the insurers have a limit per jewel and normally fire and allied perils and burglary , theft are covered. Some Insurers give cover against snatching risk also even while the event happens outside your home.
Remember getting insurance is not a onetime event, you’ll need to revise the cover availed as per the rise in inflation. As the cost of construction and other home essentials increase you will have to push up your sum insured as well. Home insurance providers also offer discounts if you get a plan for a longer duration rather than just annually. They can also add additional features like cover for personal accident, baggage loss and compensation for new place if you are forced to leave your house due to a natural calamity.