FEATURE 24 August 2012

A Guide to Insuring Your Home

What is covered?
A home insurance policy can cover only the structure of the home, or only the contents. A comprehensive policy can cover both. The policy covers the losses to the structure and contents on account of any natural or man-made calamities. Though not comprehensive, these could be: fire, lightning, damage caused by impact of an aircraft, explosion of any sort, storm, cyclone, typhoon, tornado, flood, riot, mob violence, landslide, earthquake or any type of leakage,bursting of pipes, etc.

The contents of your home are also protected against burglary or theft or an attempted burglary. There is additional coverage available for terrorist activities and has become important with increasing threats on this front.

Contents of Home Insurance
Now that we have seen what a home insurance policy covers, the next step is to determine what to insure and how to go about valuing it.

The household contents covered are basic articles such as: furniture, fixtures, clothes, carpet, linen etc. Common household electrical appliances such as refrigerators, air conditioners, washing machines, DVD players, television sets, and electronic items like computers. Even jewellery can be covered, but only up to a specified limit.

Before signing up for a home insurance policy, note down everything you can insure. In addition to what is mentioned above, your list can also include books, CDs and DVDs, clothes, shoes and accessories, kitchen equipment including chinaware and cutlery, paintings, ornaments, antiques, etc. It can also include musical instruments, sports and exercise equipment, luggage and even food and drink items such as wine etc.

Once you are sure of the items that you need to insure, you can value the same at a price that you would have to pay to replace the same.

For example:
you have a Samsung frost free refrigerator which is four years old, you need to value it for the price you would have to pay to get a similar refrigerator which is four years old.Some of the policies available in the market are: ICICI Lombard Home Insurance, Tata AIG Home Insurance, Bajaj Allianz Home Insurance.

For example:
Insuring a home for Rs 25 lakh, the contents for Rs 10 lakh and jewellery for Rs 50,000, the annual premium is approximately Rs 2011.15.

Over insure as you would pay a heavy premium, but would not get the equivalent claim as any damage would be investigated. Therefore, you need to insure items that are of value, and up to a specified time limit.

It is important to remember that you should not over insure as you would pay a heavy premium, but would not get the equivalent claim as any damage would be investigated. Therefore, you need to insure items that are of value, and up to a specified time limit.


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