What is Home Insurance and Why Should You Purchase It?

Homeowners insurance or also known as home insurance is a type of property insurance, which covers losses and damages to an individual's private residence and/or assets in its home.

In India, some leading home insurance companies provide a wide range of home insurance policies, and these varied types insurances enable the individuals to understand the necessity of it before they pick the right plan according to their requirements. 

Following are the primary and popular types of home insurances:

The Standard Fire and Special Perils Policy

This type of insurance offers coverage against special perils and fire outbreaks. It can be brought by the house owner for its own house, and by tenants residing in rented houses. The sum insured, for this insurance is calculated by the Building - Cost of reconstruction (exclusive of land value). A Standard Fire and Special Perils policy protect the insured home against loss and damages caused due to the following incidents:

Home Structure/Building Insurance

A type of home insurance, it covers the structure of a house from risks and dangers. Moreover, it also protects from any lasting fixtures within the house such as a kitchen and bathroom fittings, ceiling/roof of the insured house, and since a few houses have garages, outdoor room/house or sheds, this insurance extends to these structures, too.

Public Liability Coverage

Inside the insured’s home, by any chance, if a guest or a third party experiences some damage on its property, then this home insurance provides coverage against the same.

Personal Accident

This home insurance policy or plan covers your family and own self by providing you with compensation in case of permanent disablement or death of the insured person due to an accidental or physical injury.

Burglary & Theft

If burglary or theft occurs in the insured house, and if any valuable contents are stolen/damaged, this insurance policy will cover you for it.

Contents Insurance

When you purchase home insurance, you're not just insuring the house, but also the high valued contents inside it. Hence, this type of home insurance policy aims to protect the goods inside your house from damages and/or loss due to theft, fire, flood and other mishaps. It also covers vital documents, portable equipment, jewellery, TV, refrigerator, etc. This policy will also assist the individual while replacing the interiors of its house if it gets flooded or burnt into ashes by fire.

Tenants’ Insurance

If you're a tenant, you might have rented a house or flat, and in such cases, it'll be a wise act not to opt for buildings cover, instead, focus on protecting your valuable contents. This type of insurance is a must for tenants because although it's a rented house, it is still very much yours, at least until you're residing in it.

Landlords' insurance

As a landlord, it's your prime duty to maintain the building/apartment/structure of the house you are planning to rent out. Hence, there is specific insurance designed for landlords- The Landlords’ insurance policy is an ideal one to opt for if you're a landlord, and it also covers other things like public liability and loss of rent.


Why Should You Purchase Home Insurance?

Well, just like how you opt for insurances for the medical and financial well-being of your loved ones, your house requires some kind of protection from various external perils, too. Hence, home insurance is invented for this reason- to protect your house from natural or man-made risks. The various reasons as to why house insurance is vital are listed below:

  1. The primary reason for purchasing home insurance is to protect your house from damage or loss, which may take place. 
  2. If you’re taking a loan to purchase/construct a house, your lending bank will request you to provide proof that the property in question is appropriately insured.
  3. Home insurance protects you from legal liability/third party liability that could arise in case the third person suffers an injury while being on your property.
  4. The insurance also helps in reducing financial burden in case of damage or destruction to the property. In a favorable situation, you even might not need to pay a Rupee as the insurance covers the expenses for repairs.
  5. Some home insurance plans cover the contents of your house as well, such as appliances, furniture, furnishings and jewellery, too.
  6. Suppose you are away from your home and suddenly a fire breaks out. When you return it appears that your premise is no longer habitable, other arrangements for temporary accommodation elsewhere has to be made. Fortunately, if you have home insurance, it will mostly cover the alternate accommodation expenses, which you will incur while your house gets repaired.
  7. Home insurance also protects you against loss or damage that could happen due to robbery or theft.
  8. Besides all the above reasons, home insurance provides peace of mind. You have the assurance that in case if unexpectedly some damage or destruction happens, the insurance will cover you from the financial losses.

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