Mumbai: Buying a home could be the single largest investment you are going to make in your life. It is a massive task that involves meticulous planning, which revolves around accumulating saving, and extensive research before you take the plunge.
However, the fact that one can easily own a house without investing money in buying home insurance makes most people disregard the entire concept of home insurance. Homeowners often feel that home insurance is a sheer wastage of money they assume it is a certain investment for an uncertain event.
However, with the drastically increasing number of natural calamities, fires, burglaries, and thefts, it is wise to take up adequate home insurance in order to avoid a major financial setback in the future.
With just a little care, you can certainly avoid the financial setback. Since your house is one of your biggest assets, it does make sense to insure your house and most importantly, its contents.
Earthquake
In the last few decades, India has suffered several major earthquakes that have claimed millions of lives and have caused loss of property worth several billions of dollars. Be it the Gujarat earthquake on 26th January 2001 or the one in Kashmir on 8th October 2005, in both these earthquakes, millions of people lost their properties.
Another major concern is that of the total economic losses after most natural calamities like earthquake, not even 15% were insured losses. In order to protect your property from a financial loss during an earthquake, it is best to buy home insurance.
Almost every home insurance policy covers losses incurred due to natural calamities like an earthquake. The feature is generally pre-included in all the home insurance policies and it gives the policyholders the choice of insuring both, the structure as well as its contents.
Fire
In the last few months, several incidents of fire have been reported from all across the country. A major fire broke out on the 5th floor of Pandit Deendayal Antyodaya Bhawan at CGO Complex in New Delhi on 6 th March 2019 that claimed one life and caused loss of property worth millions.
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On February 12, a massive fire broke out at a central Delhi's hotel, Arpit Palace, killing at least 17 people, including a woman and a child while the property was completely destroyed. The loss of property reported in both these cases was worth millions.
In order to avoid financial loss of a property during a fire, it is best to buy insurance for your property that includes home, shop or building. The different home insurance policies available in the market offer adequate coverage for two major constituents of a home – structure and its contents. The policy also provides cover against fire and allied perils for all fittings and fixtures.
Flood, Storm, Lightning
As per several reports, the frequency of natural disasters in India has increased significantly over the last decade and the losses reported from these natural calamities are estimated to have reached over billions of dollars. In order to protect your property against any loss caused due to flood, storm or lightning, it is best to have adequate home insurance.
Though a regular home insurance policy does not always cover the above mentioned natural calamities, you can always buy add-ons to protect your home and its contents from any of the mentioned natural disasters. While most of these add-ons increase the premium of the policy, at the same time it provides complete coverage against any financial loss.
Burglary and theft
The cases of burglary in India narrate a very frightening story! As per the available data, the cases of house theft and burglary in India are witnessing a rise of almost 20 - 27% each year.
The report further revealed that the numbers are significantly high in metro cities with most of the cities witnessing nearly 4,000 – 5,000 cases of burglary each year. To avoid a loss from burglary and theft, it is advised to go for a comprehensive home insurance policy (structure + content) which covers all such events as an inbuilt feature.
However, some of the insurers provide it as add-on protection. There are even policies with dedicated plans for burglary which covers business premises against thefts and burglary.
Cost of home insurance
The average premium for insuring a house worth Rs 50 lakh comes around Rs. 2,200 to Rs. 2,600 annually. However, a detailed home insurance policy covering your home worth Rs 50 lakh along with its added contents (furniture, home appliances, etc.) worth Rs 5 lakh would cost you an annual premium of Rs 6,500 to Rs. 7,500.
(Written by Tarun Mathur, Chief Business Officer- General Insurance, Policybazaar.com)
