What is home insurance?
So, having a home insurance policy (home insurance) gives us peace of mind that we cannot prevent natural calamities but we can easily repair any damage to our home due to them.
We all must insure our car or two-wheeler but not insure our most expensive investment i.e. house. Today we will talk about what are the benefits of getting home insurance and who should get this home insurance.
Many of us do not insure our homes because we think that we will never face such a day in our life. For those who are wondering, I just want to say, “Ask anyone who has suffered such a disaster?”
I’m sure none of them would say that he already knew this would happen. Hence, having home insurance is always beneficial. There is also no need for us to talk more about which people should not have home insurance.
Many people have a misconception that a home insurance policy only covers the building of the home. Here I would like to clarify that such an insurance policy can cover electronic components, jewelry, antiques, and anything else you want to protect along with the building of your home.
What is home insurance and what does it cover?
Just as life insurance protects you, motor insurance protects your car, and home insurance or home insurance protects your home and its belongings. Many general insurance companies offer home insurance policies that one can purchase to insure their home.
Home insurance covers the loss of the home due to any natural disaster such as a hurricane, earthquake, fire, cyclone, lightning, flood, or any other natural disaster.
Similarly, even if home contents are stolen, home insurance covers the loss. Some home insurers pay for home repairs.
Some home insurers pay for home repairs.
Can any home be insured?
Home insurance companies will insure a home based on things like where the home was built, what the home looks like and what’s in it (if you want to insure the same), and how old the home is. To ensure the home or not.
For example, if your home is over 50 years old, the insurance company may refuse to insure your home. Similarly, if your home is located in an area with a high probability of natural disasters like landslides, earthquakes, cyclones, etc., the insurance company may decline (or you may have to pay a higher premium).
How are home insurance premiums determined?
Home insurance premiums are not fixed. To determine the home insurance premium, how much land is the home built on, what is its likely market value, what are the home’s components, where is the home located, what is the environment, and what? There is a possibility of natural calamities etc. Decisions are made based on that.
Generally, insurance companies only insure the building of the house. The premium is not high. But some people want to get home insurance as well. In such situations, insurance companies also insure the home property by increasing the home insurance premium.
If you live in an area affected by floods, earthquakes, or landslides, you may have to pay higher home insurance premiums.
Get home insurance or not?
No one wants to get insurance, especially home insurance. But still, it is a necessary thing and everyone should do it. Below are some points that can help you know if your home needs home insurance.
Reasons to get home insurance:
1. If you are always afraid that your house might be stolen after you, your valuables might be stolen, then you should get your home insurance so that you will be able to go anywhere without worry because you will have peace of mind that it is your home. And its products are covered by insurance companies.
2. If your home is located in an area prone to natural disasters, you can get home insurance.
3. If burglaries are a frequent occurrence in your area, you may want to get home insurance.
4. Every home needs repairs, so if you think you won’t be able to repair your home when needed, you can purchase home insurance that will also pay for your home repairs if needed.
Don’t get home insurance
1. If your home is located in an area where there has been no tax loss due to a natural disaster in the last 10-15 years, then home insurance will not be beneficial to you.
2. If your neighborhood has never been burglarized and CCTV cameras have been installed, it may not be convenient to get insurance to protect your home belongings in such situations.
Benefits of getting home insurance
Are you still in a dilemma about whether to get home insurance? So below are 7 benefits of getting this type of insurance. Just check them out and then decide whether you need home insurance or not.
1. Home insurance for home burglary, riot, assault, and similar incidents.
Fires destroy thousands of homes around the world every year. It not only destroys homes but also destroys countless dreams. You must have seen through news channels how famous skyscrapers burn. Do you think I’m going off-track?
Sorry! I am not going to mention it here deliberately, to inform you that if famous buildings like skyscrapers have all possible devices to prevent fire, how can our houses avoid it?
Although home insurance cannot prevent your home from catching fire, it can certainly help cover damages that occur after a fire. Which makes it easier for someone to repair a damaged house.
Many insurance companies offer additional discounts on home insurance to customers who install fire extinguishers in their homes (or who already have such devices in their homes).
It protects our home contents against theft. Everyone likes to go on vacation, me too, but when we go on vacation we also clear the way for thieves; They can come and clean the house by hand. Again home insurance can’t stop them.
But of course, paying compensation up to the value of the loss can save you from a heart attack (just kidding!).
Nowadays, people take to the streets to protest against any illegal activity in a peaceful way. But some angry-minded people may riot in a peaceful procession. Everyone knows what happens after that. A home insurance policy protects your home and its contents against such things.
2. Get home insurance to cover losses due to natural calamities.
A property insurance policy protects your property against natural calamities like earthquakes, storms, lightning, floods, cyclones, etc. Home insurance is an uncontrollable natural disaster that destroys many lives every year.
Therefore, a home insurance policy should be in place to deal with such eventualities.
3. Protect household items with insurance.
When buying a home insurance policy, you can choose between different valuables in your home. You can choose your electronics, jewelry, and antiques to get compensation in case of theft or loss. Doing so increases your home insurance premium rate slightly, but you get a lot more than what you pay for.
4. Peace of mind
Home insurance gives peace of mind that homes are safe. It will give you peace of mind if you choose the right insurance policy for your home (only if you act like an analytical buyer who knows all the terms and conditions before signing the contract while buying home insurance).
5. Home insurance company also pays your rent if needed
Home rehabilitation takes time after the disaster is over. So sometimes it may be necessary to stay in a rental house for a while until the house is repaired. In that case, the home insurance company pays for your temporary accommodation.
Note here that not every insurance company does this. So whenever you buy home insurance, read the terms and conditions carefully.
6. Home insurance premiums are low compared to other insurance
Unlike other insurance products like life insurance, general insurance, and health insurance, you pay a very low premium rate on home insurance and get significant benefits in return. In this type of insurance, the customer can increase or decrease the insurance premium by removing or adding certain items.
For example, if you do not insure the contents of the house when you take out home insurance, your premium will be very low.
7. Get a discount on premium protection
Obviously, from a business point of view, you will also agree, every insurance company wants to increase their profit but how can profit be made if insurance claims are paid?
Hence, to increase profits and reduce the chances of accidents, insurance companies offer additional discounts on home insurance to customers who have installed security gadgets like fire alarms, CCTV cameras, etc. to control accidents.
Important: Remember that all insurance policies are subject to certain exclusions (which do not cover special circumstances that we call exclusions), so, before buying an insurance policy (common ones like life insurance, health insurance, or home insurance) read the terms and conditions.
You can take the help of your insurance agent to understand the terms of the policy.
Where to buy home insurance?
Most common general services are offered at home. You can buy one of those fonts. Click to view a list of registered insurance companies in India. You can ensure general coverage by visiting general insurance or you can also buy insurance online.
You can purchase home insurance by visiting the insurance company of your choice, or you can purchase the font on the insurance web page.
In my view, a website is a good option for buying farm website insurance. For this type of website, you can get money from different companies. You can buy your home insurance to give a good company at a low cost.
Note: Some companies send policies at very low premiums but such companies offer very few benefits. There are many exhibits among them. So while buying a policy, also check which events your company is covering.
What is not covered by home insurance?
Every insurance policy provides protection only for a certain number of periods, it does not cover every type of loss. Following are some of the incidents that a home insurance policy does not cover.
1. No claim for intentional damage to your home or its contents.
2. Be it nuclear war, or civil war, any kind of war is not covered by loss.
3. Refer to your policy document for more details.
Disadvantages of getting home insurance
1. Buying home loan insurance is expensive
According to banking experts, taking home loan insurance is more expensive than term plans. This is because when you take a home loan, banks ask you to cover the entire amount. The premium has to be paid only once. If you take home loan insurance of Rs 50 lakh, the premium amount is also added to the home loan. This increases the EMI. With home loan coverage only, the insurance cover also decreases as the loan amount decreases. It does double damage. Most banks do not refund the amount paid for insurance even if you pay off the home loan early.
2. Understand the math of loss thus
Let’s assume if you take a home loan of 50 lakhs for 20 years and after paying this EMI for 5 years, the remaining liability is 35 lakhs. At this time, in case of an accident with the insured, the company will pay only the remaining home loan. That is, your Rs 50 lakh home loan protection plan coverage will now come down to Rs 35 lakh.
FAQs
Question 1. Is insurance required with a home loan?
Be it the Reserve Bank of India or the insurance regulator IRDA, no one has made any rule that insurance needs to be taken with home loans. However, many banks or payment institutions have started informing customers of such insurance amounts by attaching them to the loan.
Question 2. What are the benefits of getting insurance?
Under this policy, the life insured is covered for life, i.e. till his death. Its maturity period is usually 100 years. Thus, you will have to pay the premium till you reach the age of 100 years. Here, the beneficiary receives the sum assured along with the maturity benefit on the sudden death of the policyholder.
Question 3. Which should be insured?
Jeevan Umang is one of the best LIC plans. The insurance coverage is provided for 100 years of the plan. The cover can be extended by paying an additional premium to the riders with the plan. In case of survival of the insured, the plan will pay 8% of the sum assured every year as survival benefit.
Last words:
Home insurance policies are available at very low premiums and the benefits of getting them are many. So in my opinion there should be no reason not to get home insurance. With the above information, you can easily decide whether you need home insurance or not. Here we tell you that if you have taken a home loan, your home may already be insured.
