Home insurance policy types and the cover they offer against natural and man-made disasters: When it comes to home insurance, there are various policies available in the market. We examine the differences between them, to help owners to gauge the right policy
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16 January 2019 - 4:31, by , in NRI, No comments

The floods in Kerala in 2018, caused damage worth several thousand crores to property and made a large number of people homeless. One can undoubtedly protect their homes against them and minimize the loss or damage while humans cannot avert natural calamities. Insurance is the first choice, on most people’s list, but very few people take home insurance in India. Less than a percent of humans end up buying it, even though it is affordable,.

Buying a comprehensive home insurance policy will ensure a home buyer can be safeguarded against financial losses if any event occurs. The system can cover all types of natural and human-made disasters, including floods, earthquake, terrorist attacks, and even robbery. A comprehensive home insurance policy provides cover for the structure, as well as the contents of a home, against unforeseen circumstances, including natural disasters and hence, is recommended for home buyers, to ensure that they are not faced with a financial crunch.


Types of cover that home insurance provide

  • Home insurance for the structure: This policy provides home buyers with protection for the structure of a home, which consists of the structure itself, along with permanent fixtures and built-in items.
  • Home insurance for contents: This policy provides home buyers with cover for the contents of their home, including furniture, jewellery, electrical and portable appliances.



Besides the necessary protection, an insurance policy can also offer add-on covers, such as the cost of living in rented accommodation while your house is being repaired.  The owner can take system against the loss of rent if the house is rented out. If a natural calamity occurs, it unfit for earning. However, these covers are for a limited period of up to a few months after the disaster.

Landlord insurance covers the financial risk to property, caused due to natural disasters, such as earthquake, flood, fire, damages due to a tenant’s actions and so on.  The insurer pays for the replacement cost, to the extent of damage, after adjusting the deductible as per its terms and conditions when the landlord faces such financial loss due to damage to the insured property; for example, the insurance company will pay for the cost incurred in repairing the kitchen if, due to fire, the kitchen is damaged.


Insurance should you buy?

A landlord may be more concerned about the structure of the property. Hence, he may like to buy insurance that covers the risk of damage to the structure. On the other hand, a tenant may be more concerned about the belongings and so, may like to buy insurance for the contents. A comprehensive home insurance policy product, may give you the benefit of risk cover for the contents, as well as the structure. However, before buying an insurance policy, the applicant should check out the list of inclusions and exclusions, to figure out what risk hazards the insurance product covers.


Insurance for under-construction properties

What if you have purchased an under-construction property while a home insurance policy provides risk cover only for the constructed property? In this case, that it is the duty of the builder, experts suggest, to get a project insurance policy, to cover the threat to an under-construction estate from natural disasters. So, check whether the builder has taken a project insurance cover before you buy an under-construction property on a home loan.

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