Home insurance 101: Why every homeowner needs it

A home is a symbol of love and protection for a family. But, is enough thought given to protecting this symbol itself? Home insurance is all about that. Often seen mistakenly as a needless expense, it actually safeguards a home and its precious contents.

So, what is home insurance?

Home insurance is property insurance created to cover losses and damages to one’s home. It includes the physical structure of the home, personal belongings, and much more. Let’s dive deeper.

What do insurance policies protect?

Various home insurance policies cover different aspects, tailored to meet specific needs.

• Standard fire and special perils policy: Coverage against fire outbreaks and special perils such as natural calamities, leakages, damage by riots and so on.
• Home structure/building insurance: Coverage of home structure including permanent fixtures, such as kitchen and bathroom fittings, including garages, outdoor rooms and so on.
• Public liability coverage: Say, a guest experiences some damage while inside the insured’s home, then such a policy provides coverage against the same.
• Personal accident: Compensation is given if the insured person is permanently disabled or passes away due to accidental or physical injury, no matter where it has happened in the world.
• Burglary & theft: If burglary or theft occurs in the insured house, and valuable contents are stolen or damaged, the policy covers the same.
• Contents insurance: Covers valuables inside the house from damages and loss – such as documents, portable equipment, jewellery, TV, refrigerator, and so on. If there is a fire or flood, the policy helps replace interiors.
• Tenants’ insurance: A must for a tenant - because even though the property is rented it belongs to the resident during their stay.
• Landlords' insurance: This is ideal for landlords as it covers issues like loss of rent and public liability.

Just as it is crucial to know what is covered in home insurance, it is equally important to know what is not covered. There is no coverage against:

• Willful destruction of property or damage due to wear and tear.
• Loss of property due to war.
• Loss of property that has stayed unoccupied for more than a specified period.
• Money as collectibles, antiques or cash.

What are the benefits of home insurance to a home buyer?

A home buyer can experience four-fold benefits:

When and how to buy home insurance?

Anytime is the right time to buy home insurance. Most insurance companies offer it through their website, but it’s also available offline at the company branches.

Ready to buy home insurance? These are the 5 important things to be mindful of.

1. Make sure that the policy provides adequate coverage for the home's structure and personal belongings. Underinsuring can create problems in case of a major loss.
2. Understand what is excluded from a policy. Standard policies exclude damage from natural disasters like floods, earthquakes, which need separate coverage.
3. Consider riders for specific needs, such as valuable jewellery, home offices, or other high-value items.
4. Paying a higher deductible can bring down premiums, but it means paying more out of pocket in case of a claim. Finding a balance that suits one’s financial situation is key.
5. Pick an insurance provider with a good track record, customer service and a strong financial rating. This ensures they can pay out claims when needed.

The importance of home insurance is often undermined. The truth is, it's a vital part of protecting one of life’s significant investments. The benefits of home insurance are far more important than the cost. Whether you are a new homeowner or someone who has owned a home for years, evaluating insurance needs and ensuring adequate coverage is a wise decision and a robust way to protect yourself against life's uncertainties.