Buying a home is a straightforward process once you know the requirements that are essential for you. But it does not end there. With homes being one of the single-largest investments for many, having a home insurance policy safeguards it from damages that may otherwise cause hefty financial losses. Among the plethora of choices of home insurance plans, it can be confusing to select one. If you are looking to buy one, here are some commonly asked questions about home insurance policies to be aware of:
Is it compulsory to buy a home insurance policy?
No. Unlike buying a motor insurance policy for your vehicle, home insurance is not a legal requirement. However, when you obtain finance for buying the house, the financial institution may bundle a home insurance cover as part of the agreement to secure the money lent. Hence, it may be required as a part of some loans to mandatorily have a home insurance policy.
What forms part of the coverage of a standard home insurance cover?
Standard home insurance plans cover the following:
- Structure coverage where the home is safeguarded from damages to the infrastructure.
- Personal property coverage where personal articles and belongings in the house are covered.
- Liability coverage where liability to others (neighbours) is part of the policy’s coverage.
- Relocation expense cover where extra living expenses may be compensated for if displaced from your house due to damages.
* Standard T&C Apply
Who is eligible to purchase a home insurance policy?
Home insurance plans can be bought by every person who is either the owner or the tenant of the property. There is no restriction for tenants to buy a home insurance cover.
What are the factors that impact the premium of the home insurance policy?
Home insurance quotes are affected due to the following factors:
- The geographical location of the house
If the house is located in a disaster-prone zone, naturally, the premiums would be higher as the insurance company has to underwrite a higher risk.
- Structure of the house
Factors like the type of roof, wiring, and age of the house are crucial to base the premium of your policy. The older the structure, the higher its premiums. Further, the quality of the material used also impacts the premium.
- Installation of safety devices
To safeguard your house against burglary and theft, safety devices help you. If your house has certain safety devices installed such as fire alarms, smoke detectors, and fire extinguishers, it will help to keep your premiums in check.
What are the exclusions in your home insurance policy?
- Home insurance plans do not cover the pets in your home. For that, you can choose to buy a separate pet insurance policy.
- Further, damages to the house due to reckless acts such as loss due to a leaking drainage system, clogged water or gas pipe leaks are not covered.
- Damages due to acts of war, riots, and nuclear damages are specifically excluded from a home insurance policy’s coverage.
- Home insurance plans do not cover the damages to your automobiles or commercial property for which separate insurance plans are available.
* Standard T&C Apply
These are some of the commonly asked questions when buying a home insurance policy. When buying one, it is important to buy one only after consideration of the several available options. To aid you in that decision, a home insurance calculator comes in handy that not only compares based on price, but also on the features it offers.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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