5 tips for first-time homeowners insurance buyers
Owning a property is like a dream for many Indians. However, translating this into reality takes hard work, diligence and financial commitment. As a first-time home buyer, you need to be very careful and have a thorough understanding of the processes involved. In all the excitement of buying a home, you shouldn’t overlook one of the most important aspects of home ownership: home insurance. A home insurance policy ensures that you remain financially stable in the event of damage to your property or valuables inside. It is therefore always advisable to insure your home.
Since there are several factors to consider when choosing the right insurance policy, there are a few aspects you need to be aware of before choosing one.
Understand what your home insurance covers
Home insurance is a type of property insurance that covers the structure of the house and its contents against unforeseen loss or damage. Home insurance coverage can be purchased by homeowners (for their own home) and tenants residing in rented homes. In India, there are two types of cover available. Structure insurance, which covers losses resulting from structural damage to the home due to natural calamities, and contents insurance, which covers loss or damage to the contents of a home, such as damage to electronic devices, jewelry, furniture, etc. However, the amount of coverage you need depends on factors such as your location and the type of home.
Home location: The location of your home can influence the type of coverage you need.For example, if your house is near the sea, you need protection for your electronic devices which are easily damaged due to corrosion. Similarly, a region prone to natural calamities is often affected by earthquakes, cyclones or floods. In this case, you must ensure that structural and content damage is covered.
The insurance coverage varies according to the type of house: if you are insuring a holiday home, apartment, land, bungalow or rental property; coverage may differ as there are different risk factors associated with each type of home.
So choose an appropriate insurance policy keeping these factors in mind.
Give the right information.
When applying for insurance, it is important to provide accurate information about your property and the contents inside your home. For example, mentioning the level/floor of the property, the precise accumulation area, the plan of the building/floor, the number of appliances and the details of the valuable jewelry will allow the insurer to assess the correct coverage and to offer the best protection. Many claims are denied and policies are canceled due to incorrect information.
You know what is not covered?
Knowing what is not covered by your home insurance policy is crucial. Always check the exclusions in your policy in order to go through the home insurance claims process smoothly. Many insurance policies list specific types of damage they do not cover, such as intentional destruction of property, loss and damage caused by war, volcanic upsurge, seepage loss, and contamination damage. If there are any exclusions you would like to have in your policy, you should obtain additional coverage if available.
Enhance your coverage with add-ons
Supplemental coverage will help you in areas that your standard home insurance plan may not cover. Comprehensive home insurance coupled with additional coverage tailored to your needs is all you need to ensure your dream home is well secured. Some of the additional coverages include protection for portable electronic equipment such as cameras, audio visual, diagnostic and medical equipment, jewelry and valuables, terrorism, loss of rent and more. You can also protect your premises against burglaries and break-ins with specially designed additional covers.
Documents required for processing complaints
Filing a claim is an essential step in recovering from a disaster. When it comes time to report a claim, make sure you have all the information and other specifications about your home at hand and ready to go. When filing a complaint, it is essential to remember that providing insufficient or incorrect information may delay or reject your complaints. A completed claim form, construction plan, FIR or fire department report in case of theft or loss, invoices/receipts, KYC documents and a void check to receive the claim amount electronically are a few. -some of the documents you may need depending on the type of claim. This will also ensure a smooth claims process.
Buying a home can be one of the most important investments of your life, but home insurance isn’t the first coverage on most people’s lists. Remember that home insurance acts as an important backup in case something goes wrong. And with growing uncertainty, purchasing home insurance becomes a future investment that will protect you from any major financial setbacks.
The author is the CEO of Reliance General Insurance Company.
(Disclaimer: The opinions expressed belong to the authors and Outlook Money does not necessarily endorse them. Outlook Money will not be liable for any damages caused to any person/organization directly or indirectly.)