Home Insurance in India
A home is a lifetime commitment as we invest in it financially as well as emotionally. We take home loans, pay EMIs for a long time, and it is a place that shelters our family. Just like any other investment, we need to safeguard our home from losses incurred due to theft, fire, explosions, and natural calamities.
The insurance that covers damages to the structure of the house or the contents/belongings inside the house, due to calamities such as fire, flood, theft, and earthquake, is known as a Home Insurance.
Steps to calculate home insurance premium
Home insurance covers damage to both the structure and the contents. The owner of the house can buy both the covers, while a tenant can only insure the contents like appliances, jewelry, clothes, etc. To calculate the premium, follow the steps as mentioned below –
1. Find the value of your assets –
- Total built-up area (sq. ft.)
- Cost of construction in rupees per square feet.
- Value of all the contents of the house – jewelry, appliance, furniture, etc.
2. Calculate your insurance premium using online premium calculators –
- Go to any insurance comparing website or the official website of any insurance provider.
- Select the ownership type – “owned” or “rented.”
- Fill in all the details on the screen.
Some Features of Home Insurance Plans:-
- The home structure insurance provides coverage for the cost of reconstruction of the damaged part of the house.
- Home content insurance includes consumer durables, furniture, fixtures, utensils, jewelry, clothes, etc.
- The cost of the contents is the Market Value after depreciation.
Types of Home Insurance
Home Insurance provides two types of covers –
- Home Structure Insurance – It covers damage to the structure and reimburses the construction cost of parts damaged. This cover can be bought by the owners only.
- Home Content Insurance – It provides compensation against theft or damage to contents or belongings of the house caused primarily by natural calamities. There are multiple variants under this insurance that vary with every insurer. Both the owner and the tenant can buy this cover.
- Rent Cover – It provides reimbursements against expenses towards the rent paid by the owner for alternative accommodation sought during repairs to the insured house.
- Terrorism Cover – It covers damages caused by acts of terrorism.
- Burglary and Theft Cover – It covers any damage to structure or contents caused by theft and burglary.
Every home insurance policy provides cover for a variety of natural and man-made calamities. You should study multiple policies and read the fine print carefully, and find a plan best suited for your environments. For example, a person staying in earthquake or tsunami prone areas should look for policies that provide cover against damages by these natural calamities.
What are premium calculation factor
The premium depends on a number of factors like –
- Sum Assured
- Construction Cost
- Built-up area
- The region where the property is located
- Add-ons selected