TomorrowMakers

A home is more than 4 walls and carefully picked out paint. It’s about security, comfort and love. And home insurance is the best way to mitigate any damage that may be caused to it.

6 compelling reasons why you need Home Insurance

Homeowners need to insure their homes for much the same reason that they need to insure themselves, their cars or travel abroad; it’s precious. Any damage or destruction to it could have dire emotional and financial consequences, at least the latter of which the right insurance plan could help mitigate.

  1. Natural Disasters are a dangerous reality

In the Nepal Earthquake in 2015, 5.6 million lives were affected, and 473,000 homes were destroyed, causing an overall financial loss of around Rs. 1,000 crores.

With a robust home insurance plan, you can protect yourself against all sorts of Natural disasters or “Acts of God” such as earthquakes, typhoons, cyclones, floods, landslides, etc.

Related: What is an Act of God and how can you safeguard yourself against it?

  1. Man Made risks can cause a lot of damage

Like every crime show on TV will prove, despite the fanciest of safety gadgets and security equipment, manmade threats such as thefts, robberies, terrorism, riots, strikes, etc. are a very real risk. While not every insurer offers protection against such events by default, you can ask for the benefit in the form of a rider.

  1. You need cover regardless of where you live

Even if you are renting a flat or an apartment, or are living in a housing society, you need to get your home insured. For example, if you live in a housing society that includes insurance in your leasing contract, you may not have AOG protection. If you are a renter, you may only get protection against fire and burglaries.

  1. Everything has value

Home Insurance usually covers two things- the construction of your house, and the contents within. To understand the difference, look at it this way: If your house were turned on its head, the former is what would stay in place and the latter is what would fall down. This includes costly domestic appliances, audio and visual appliances, light fixtures, furniture and more.

Many of us also have other items that hold sentimental or artistic value, such as inherited jewellery or art work. To ensure that what holds meaning for you is insured, read the insurance policy document carefully and consider opting for a rider or two.

  1. There may be others who need protection

An unfortunate event may occur while a third party or guest is staying in your home. Insures like TATA AIG offer a Public Liability benefit which can protect you from compensation and legal expenses that arise due to damage or bodily injury to third parties.

Additionally, there are sometimes ‘other structures’ which are a part of your property but not attached to your home or perhaps are located off the foundation, such as a garage, a shed or a room for your domestic help. With the right rider, even these parts of your home can be insured.

  1. You may need help with relocation

In the worst case scenario, you may need to find an alternate place to live while your home is being reconstructed, much like the 1.8 million people who were displaced in the South Indian floods in 2015. Some insurers can even help fund this stage of your life. For example, if your house is rendered uninhabitable, TATA AIG covers additional rent of up to Rs.30, 000 for 3 months, which can fetch you a comfortable way to live while your home is rebuilt.

A Word of Caution

As a responsible policy holder concerned about the financial security of his/her family, the most important thing about Home Insurance is the Terms and Conditions in your policy document. The difference between getting every tangible item in your home insured, or just protecting your walls against forest fires, is how well you ask questions and ensure your policy covers exactly what you want it to.

To have some of your questions answered, read: What is Home Insurance, what it covers, and why you need it.