Home insurance provides coverage for the costs and damages incurred by your home or any insured property. It falls under the category of property insurance and is one of the various types of general insurance products available.
Home Insurance – Coverage & Exclusions
Home insurance, also known as homeowner’s insurance, provides protection for your residence, whether it be a bungalow, apartment, rented flat, owned house, or built home, against various risks. It covers expenses related to damages caused by unforeseen events. Claims for home insurance can be made in cases of damage resulting from the following causes:
- Instances of natural disasters such as windstorms, hailstorms, fires, or lightning strikes
- Incidents caused by human actions like riots, theft, vandalism, or property destruction resulting from civil unrest
- Harm caused by railway or road constructions
- Collisions involving airplanes or any vehicle (excluding your own)
- Explosions or the presence of smoke.
Coverage offered under Home Insurance Policy
The home insurance policy offers protection against a wide range of damages. This includes damage to electric lines, water pipelines, and the structure of the house. Additionally, it includes coverage for broken windows, doors, floors, and walls. The policy not only covers the house itself but also provides protection for the loss or damage of the contents inside. The costs covered by the insurance can be categorized into four main types related to the insured property.
- Costs for damage to the interior of a property
- Expenses incurred due to damage on the exterior of a property
- Compensation for the loss or damage of personal belongings within a house
- Coverage for any physical injuries sustained while on the affected property.
Home insurance coverage can vary based on several factors such as the type of residence (rented/owned) and its size. Additional factors like age, location, replacement value, and the cost of belongings play a role in determining the coverage. Your claim history and the crime rate in your area are also taken into consideration. Ultimately, the type of coverage you select is up to you. You have the flexibility to choose the premium amount and deductible that best suit your needs. A higher deductible typically results in lower premiums, while a lower deductible leads to higher premiums.
Exclusions
Home insurance provides coverage for a wide range of natural and man-made causes, but there are certain accidents that are not covered. Intentional damages, neglect, war situations, and ‘Acts of God’ are among the exclusions that are not covered by home insurance.
- Acts of God, such as floods and earthquakes, are typically excluded from standard home insurance policies. However, some insurance providers may offer additional coverage for these disasters in certain situations or through customized policies.
- Damage resulting from inadequate maintenance or neglect of the property is not covered by home insurance.
- Home insurance policies usually do not cover damage caused by termites, rodents, birds, rot, or molds.
- While fire and smoke damage may be covered in specific circumstances, smoke arising from industrial or agricultural operations is typically not included.
- Intentional or accidental damage caused by a member of the household, such as a collision with one’s own vehicle, is generally not covered by home insurance.
- Property destruction due to the Ordinance of Law or a court order is not covered by standard home insurance policies.
- Damage resulting from nuclear hazards or war within the country is typically excluded from home insurance coverage.
Why should you have a Home Insurance Policy – Benefits
A home insurance policy is essential as it provides coverage for any financial losses that may occur. Additionally, it safeguards you from bearing the burden of property damage and loss of belongings in situations beyond your control. The advantages of having a home insurance policy include:
- You may receive financial assistance for repairs and damage control resulting from unforeseen circumstances.
- In case of damage caused by a third party, you can file an insurance claim without engaging in a legal dispute.
- Obtaining a mortgage (home loan) for repair, reconstruction, or expansion becomes simpler with property insurance in place.
- The expenses related to the loss of personal belongings and household contents can also be reimbursed. These belongings may include appliances, furnishings, furniture, electronics, or jewelry.
- Home insurance coverage extends not only to damages caused by accidents or natural disasters but also to incidents like theft, robbery, or burglary.
- Various types of home insurance policies are available to meet specific needs. These policies include Landlord’s Insurance and Tenant Insurance. Landlords can claim insurance in case of damage caused by tenants (public liability) or loss of rental payments due to other reasons. Similarly, tenants can insure their own belongings in a rented property.
How to Claim Home Insurance?
To receive reimbursement from your home insurance policy, it is essential to provide the necessary documentation and evidence of the damage incurred. This includes documents such as police reports, fire brigade statements, and medical officer certificates if applicable. Additionally, court summons, repair estimates, and proof of ownership for damaged contents may be required.
You are required to pay a deductible when filing a claim for home insurance. The amount of insurance coverage you receive will be determined by the type of policy you hold, whether it is based on actual cash value or replacement value. Further details are outlined below:
- The present value of a house or house item is determined by the actual cash value. This value takes into account the depreciation that has occurred since the item was new. Depreciation refers to the decrease in value of an item or property over time, considering its age and condition. The calculation of depreciation may vary depending on the insured item and the insurance company.
In the event that a television set is insured and experiences damage or theft as a result of a robbery, the insurance payout will be determined by the TV’s depreciated value at the time of the claim.
- Replacement value coverage ensures that the insurance will cover the full cost of replacing the damaged property or item, providing the necessary amount for its replacement.
Assuming the television set that has been damaged or lost is 3 years old, the insurance coverage will be based on its replacement value. In such a case, the insured party can claim the insurance amount equivalent to the cost of the TV set at the time of its purchase. The insurer will then provide coverage for the expense of purchasing or replacing the lost or damaged TV set with a new one of comparable quality.
Wrapping it up:
During these extraordinary times, it is essential to have a home insurance policy in place. This will provide protection for your property in case of unexpected damage and the associated expenses. Before finalizing your decision, it is crucial to review what costs are included and excluded in the policy. Consider taking out multiple insurance policies to benefit from discounts. Another option is to agree to share repair costs in order to reduce your premiums. In the event that you have insurance from more than one provider, they will compensate you proportionately when you file a claim. Keep in mind that if you decide to sell the property, the home insurance policy will be automatically canceled, even if the house is rented out.
FAQs
Can I make a home insurance claim on a partially damaged house?
It is possible to file a home insurance claim for a house that has sustained partial damage.
Can I increase the insurance amount for a home insurance policy later on?
It is possible to raise the insurance coverage for a home insurance policy at a later time by reaching out to your insurance provider and adjusting the policy terms. Be prepared to pay a greater premium or increased deductible for the higher insurance amount.
Where to buy a home insurance policy from?
You have the option to purchase a home insurance policy from any authorized bank or provider of your choosing. You are not obligated to select a specific company for your home insurance policy.Read More
