Owning a home is a dream that many people see with open eyes. It is the desire of every person to buy or construct a home for his/her family. A home is not just an amalgamation of bricks, concrete and TMT bars. But, it is a structure on which you invest both financially and emotionally. After saving money for years, you are finally able to buy a home of your own. For these reasons, it turns out to be essential that you must protect your home by purchasing a home insurance policy.
In India, mostly life insurance, medical insurance, and car insurance were the most sought-after products in the field of insurance. Recently, house owners have started to realize the importance and benefits of purchasing a home insurance plan. The occurrence of natural calamities in India has increased in the last few years. Flood, cyclones, and landslides can cause massive damage to your property. Plus, burglary and vandalism related damages can also make a huge hole in your wallet. Overall, a policy can save you and your family in many ways. Some of the reasons to buy a home insurance policy are explained in this article. Before we focus on the reasons, let us tell you about some important aspects.
What to know before buying a plan?
There are certain aspects one must remember at the time of purchasing a home insurance plan. First of all, having a clear idea about the term ‘sum insured’ is very important. It is the maximum compensation you are eligible to receive from the insurer if the house gets damaged completely. The sum insured amount is calculated on the basis of your property’s value. Hence, you must make sure the amount calculated by the insurer is almost close to the actual value of your property.
A lot of homeowners tend to consider the current marketplace value as the sum insured value for their property. Well, this is not the right way for sure. The reconstruction cost of your house depends on many factors; such as- its design, the number of floors, finishing, etc. Plus, you also have to take into consideration the labour charges (both skilled and semi-skilled). This is why it is better to hire experts to assess the current value of your home. This way, you will be able to determine a more accurate amount.
Once you are sure about the sum insured, the next thing you need to focus on is the tenure of the policy cover. In this regard, there are mainly two choices available. You can choose between- annual cover and multi-year cover. When you buy a yearly plan, you get the advantage of re-assessing the sufficiency of the sum insured at the end of each year. But, when you opt for a multi-year policy, you get the advantage of discounted premium rates. So, the selection is something you need to think about.
The advantages of home insurance policies explained
Now, let us point out the key benefits of protecting your home with a well-planned property insurance plan. Having an idea of the benefits will allow you to make optimum utilization of the money invested by you.
- It protects your investment: The first reason why you should buy a home insurance policy is related to the protection of your huge investment. Most of us end up spending almost half of our entire life’s income on buying or constructing a home. So, when the investment is of such a big scale, it turns out to be too important to protect it in the right way. When you have a policy, you do not have to worry about anything unwanted things happening to your property. You will not have to bear the financial impact in case your house gets damaged, even completely. This way, your investment remains protected.
- The premium is affordable: If you compare the premiums of home insurance policies with other insurance products in the market, you will find the former to be much more affordable. Yes, home insurance policies are cheaper in comparison to life or medical insurance. By paying a small premium amount, you get loads of benefits in return. All you have to do is buy the right policy, which can provide you with an adequate amount of financial protection.
- Natural calamities covered: Most of the insurance companies in India nowadays also cover natural calamities in their policy. If your house is located in a coastal region, buy a policy that covers damages caused due to cyclone, storm, typhoon, tornado, flood, and hurricane. Similarly, other calamities are also covered by today’s home insurance policies, such as bushfire, lightning, landslide, earthquake, etc.
- Man-made damages covered: Crime-related incidents like robbery, burglary, and vandalism can cause a major loss to your property. Fortunately, most of the policies also offer cover from a wide array of man-made destructions.
Besides them, there are many reasons that make home insurance policies so advantageous for the homeowners. You simply need to compare and find out the most suitable policy within your budget.