General
- Arguably, property is likely the most expensive asset that you’d purchase in your lifetime, yet most investors don’t consider it a priority to insure. Nor is it mandatory by law, as in the case of motor insurance, which offers coverage to the vehicle owner/driver against financial losses due to accidents or other kinds of damages.
- An asset that takes a large chunk of your life savings deserves some safeguarding. Though the predictability of events and its frequency maybe difficult and limited, respectively, its severity and consequences can be high and multifold. To ensure consequences do not lead to compounding effects particularly in the form of financial loss, choose a home insurance that’ll have your back.
- A home insurance has you covered against two major risks - structural damage and content damage. If you’re insured for structural damage, you can avail financial assistance only if the structure of the house or building has been damaged. This damage could be either from natural disasters like floods, earthquakes, landslides or storm or it could be from fire, theft, riots, strikes, etc. A content damage cover will financially protect you from the loss or damage caused to the contents of your home such as furniture, gadgets, appliances etc. Further, third party liabilities are also covered in home insurance like vehicle insurance thereby ensuring no financial loss owing to collateral damage to any third-party (neighbours, house help etc.). Homeowners and tenants can purchase it alike. While an owner can avail financial cover for both, a tenant will only require content damage cover.
- Here're a few broad guidelines to help you go about choosing a home insurance policy;
- A good start to buying a home insurance cover is to decide beforehand on the type of cover i.e., structure, contents, or both.
- The basic home insurance cover is the one that shields you from any damage to the building i.e., the value of the structure. Therefore, it’s critical to arrive at a right valuation. This is different from property cost or the loan outstanding on the property. Put differently, it’s the cost of reconstruction of your home.
- While buying a content damage cover the value must usually be mutually agreeable between you and the insurer (i.e., on an agreed value basis). Take stock of all the items you’d like to insure to arrive at an overall valuation. Gadgets and appliances can also be covered against breakdowns.
- A home insurance is different from home loan insurance which is typically taken while signing up for a home loan with a lending institution.
- It’s important to revisit the valuation each year. Review coverage to protect yourself from inflation as it can push up construction cost. Recalibrate list of contents every year during renewal to notify the insurer for any additions/deletions.
- If you’re looking for guidance on essential insurance cover for your home and contents, reach out to us to help you pick out the most suitable policy that’ll be in line with your needs.