You might have already spent a big chunk of amount in building/buying a house, so why should you spend extra on home insurance when you can use the same amount for furnishing your house? Many people think that their houses are calamity or disaster-proof and nothing will happen to them or their ‘abode’. But wait, nature never discriminates and how can you forget incidents like theft, riot, burglary, etc.; which are rising at an alarming rate in India?
For most of the people, purchasing a house is a major investment decision. Such a large investment necessitates the need of having a proper home insurance cover. It would be unwise to ignore the risks and potentials which are attached to your house. So, here I am giving you six reasons of purchasing a home insurance in India:
- Natural calamities are today’s harsh reality: Take for instance, in 2013, the insurance industry pegged losses up to Rs 3000 crore from the Uttarakhand natural calamity. What if your house faces the brunt of nature’s fury?
The destruction a disaster brings with it leaves a dent in the pockets of those who are affected. However, with a home insurance policy, it is possible to avert such a setback. A viable home insurance policy offers comprehensive cover and shields your house against natural calamities like earthquake, floods, cyclones, etc.
- Man-made risks can cause you financial loss: As it is evident from crime shows running on television, sometimes, even trendiest and hi-tech safety gadgets fail to deter thieves. You will be surprised to know that houses of even VIPs are not safe. Last year, several costly items, including idols and copper Gandhi glasses were stolen from Congress leader and Lok Sabha MP Shashi Tharoor’s home. Also, in 2014, house theft cases increased by over 300% as compared to the previous year.
Moreover, the frequency of burglary and robbery increases during summer when most of the people are away on vacations. In Vadodara, house break-ins, robberies and thefts are rising despite police vigil.
Man-made threats like riots, strikes, terrorism, robberies, etc; are the reality of today’s time. Even if your house is equipped with all the important security equipments, it is still vulnerable to theft. So, buy home insurance policy now if you want to secure your house against all these mishaps.
- You need cover even if you are a tenant: Even if you are living as a tenant, you can buy a home insurance policy to cover content of your house. Instead of buying a comprehensive home insurance policy, go only with a content cover to protect your items from fire and burglary.
A fire erupted at my friend’s house Harsha due to short-circuit in his refrigerator and engulfed property worth Rs 60,000 (as seen in the below image). As he was a tenant, the landlord asked him to repaint the entire room. He never thought of buying a home insurance policy but this incident changed his mindset!
- You have purchased costly items: Many of us have such items that hold sentimental value, like jewellery, artwork, painting, etc. What would happen if a serious damage happens to your most cherished family heirloom? In 2016, property worth Rs 10 lakhs, including 25 sovereigns of gold jewellery and Rs 1 lakh destroyed in blaze in Nagapattinam, Tamil Nadu.
A home insurance policy is the right way to protect both the monetary and emotional value of your precious items.
- You may need assistance while relocation: If you stay at another place because your house is destroyed or damaged by an insured peril, the insurer will cover additional rent expenses. In most of the cases, the maximum rent coverage is up to Rs 1 lakh for six months and this cover is available only if you are insuring the structure of your house as well.
- It is affordable: Last but not the least, you should buy a home insurance because it is surprisingly affordable. For instance, for a structure and content of your owned home with Rs 10,00,000 sum insured, you would have to pay Rs 6,257 for a five-year plan, which comes around Rs 520 per month. Considering the amount that you spent towards construction and furnishment of house, this is a meagre amount which you have to spend on your home insurance policy.
Even if there is a slight increase in premium rates, think twice before dropping your cover. If, God forbid, there is any loss or damage, you may be glad to know that you have a comprehensive property insurance plan.
Moreover, you can go for a long-term home insurance plan to enjoy affordable premium rates. There are various home insurance companies in India, which are offering homeowner insurance for a longer tenure of say ten years in one go. Longer the cover, lesser would be the premium amount.
While it is imperative to have a homeowners’ insurance, it is necessary to look for various terms and conditions, such as sometimes only the building value is insured and not the ground around it, like parking space, garden, etc. Also, some insurers cover jewellery and other precious items only if they are kept in a safe custody at home.
Further, take the proper home insurance cover— neither too much nor too little.
As rightly put by Jane Sherwood Ace, “Home wasn’t built in a day”, so considering the money and efforts which you have invested in buying/building a house, go for a comprehensive home insurance policy to keep your house and its warmth intact for many more years to come!