Home Insurance - Is It Important?

Shelling out money annually for an intangible product can feel like pouring water into sand. Most people feel this as the importance of home insurance isn't known. A home is a place for many memories and huge financial investments, safeguarding your home with minimal insurance cost isn't a bad idea. The trend of home insurance has picked up drastically in India. (Ariel)

Home Insurance is a policy that combines insurance on your physical house as well as contents in your home. Banks like HDFC offer home insurance at competitive rates, e.g. to insure a home worth over a crore would need an annual fee of 10,000, which is quite minimal. Let's now understand some inclusions and exclusions in home insurances (Ariel Narrow)

Inclusions:
  • Fire, Lightning, Explosions
  • Terrorist attacks, Riots
  • Water tank bursts or pipe bursts
  • Natural disasters
  • Impacts by vehicles
  • Missile testing operations
  • Burglary or house breaking

Usually, the sum insured would be the reconstruction cost of the house in event of any damage. This value is determined by the construction costs in your city or suburb. (Modern)

Exclusions:
  • Willful destruction of property
  • Loss or damage caused by depreciation or wear and tear
  • Loss or damage caused directly or indirectly by nuclear weapons
  • Loss or damage, whether direct or indirect occasioned by war, invasion, civil war etc.

*Please note that these are illustrative exclusions, please contact your banker for a detailed list and price quote.

Bottom-line, it's worth insuring your home as it isn't expensive get an insurance.