For majority of us, home is the biggest investment of our lives. However, many of us have not insured our homes. Lack of awareness is the major reason behind it. A property insurance can keep the insides and outsides of your home safe in case of an emergency.
Home insurance plans are designed to ensure adequate protection for homeowners against any sort of unexpected events including fire, robbery, theft, earthquake, flookd, and tremor among others. That means, in the event of any damage caused to your house from perils mentioned in the insurance policy, the insurer will compensate the construction cost of the home.
The reconstruction value of the damaged house is normally calculated on the basis of constructed area before the damage and the construction cost. The amount is generally predetermined by the insurer. In the event of loss, you need to get an estimate of the rebuilding cost to get the amount reimbursed from the insurer.
Here are a few things that you need to consider before buying a home insurance.
Adequate Sum Insured
The sum insured should be adequate to cover the expenses of construction, god forbid if you need it. Make sure that the insured amount reflects the correct value of the property. You can check the current construction costs from the municipal corporation to know the accurate amount.
Insurance companies normally pay restoration charges and hence, the sum insured may vary by 10-15% of the actual value of your house.
You can go with a yearly home insurance policy that would allow you to re-evaluate the adequacy of the sum insured every year. You can also opt for a lasting guiding principle with a discount of up to 50% on the policy based on the tenure and sum insured.
Here are other reasons to buy a home insurance:
Coverage against the damage of possessions
A home is more than just brick and walls. It is more about decoratives, furniture, appliances, and more. A home insurance will not just cover the cost of structure but also the content/ articles kept inside it. It would include home appliances, jewellery, furniture, gadgets, and more.
Temporary living expenditure coverage
In case of an unfortunate event where you need to move out of your house for reconstruction/ maintenance. You will have to rent out an alternate accommodation to stay until your home is refurbished completely. A home insurance will can also cover your expenses incurred through rent payment. Sign up the upper cap judiciously based on your home size and the place you would need to rent if you need to.
A capable home insurance can bring much needed financial stability and peace of mind.