Buying Home Insurance? Here’s What You Need to Know Quick, think of a natural disaster that destroyed homes, commercial property and government infrastructure. Can’t zero in on any one of them? That’s because of late, there have been so many incidents, it is difficult to remember just one.
Earthquakes damaging homes, floods ravaging even urban areas, fires spreading like, well, wild fire, means natural calamities can wreak havoc with your dream home and cause some serious damage to your pocket.
What to Insure?
The first thing to do is to decide exactly what kind of coverage you need. You can opt for either basic fire insurance, or the Householder’s Package Policy (HPP). An HPP will protect you against natural calamities such as fire, lightning, storms and floods. But the best thing about an HPP is that it protects you against riots as well. Some insurance companies will charge an extra premium in order to cover earthquakes and landslides. You can also insure your structure and its contents against terrorism if you opt for an add-on cover. An HPP also offers optional cover that insures the contents of your house against burglary, damage, and mechanical or electrical breakdown.
Underinsuring Does Not Work Since most Indians think of home insurance as an indulgence, or an unnecessary expense, they end up undervaluing their own property to save on the premium. It is self-defeating to undervalue your precious home. Look at it this way: you are insuring your home to get adequate relief, should anything go wrong, and not to save a few bucks. If you under-insure your property, you will not get sufficient cover to restore and repair your home if and when the need arises. Compare Policies before Buying One It is imperative to compare home insurance policies before choosing one. You must have seen any number of ads on TV, telling you to compare policies before zeroing in on the one you think is the best. That’s the right message to take.
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