Natural calamities come without any warning, and we are all well aware of this fact. Other than the novel Covid-19, various states in India have faced multiple natural calamities in the last few months, starting from a cyclone, flood, and earthquakes. According to industry data, India has experienced more than a dozen earthquakes in the last 2 months. Despite the best security and protection measures, the risk of thefts, damages due to fire and natural calamities always stays.
Whenever such natural disasters occur, apart from human lives, they usually destroy trees, homes, and other property along with vehicles. Even though such calamities are not under human control, however, after losses due to such incidents, any monetary help may certainly help one in recovering fast. Home insurance secures your finances at the time of such calamities. In case your home gets damaged due to a natural calamity, with home insurance, you get the financial back-up to tackle the expenses for repairs.
There are various insurance companies that offer home insurance policies. Home insurance policy is offered for different types of houses such as home insurance for owners, tenants, and housing society insurance. Therefore, if you are an owner, there is a different type of insurance for you. If you are living in a rented house, there is different insurance and so on.
Home insurance policies usually cover the structure of the house and the contents – including prized possessions – against damage from natural calamities like floods, earthquakes, storm, and man-made events like riots, etc. Home insurance policies usually range from indemnity plans, reinstatement plans, new for old plans, and agreed value plans.
- Indemnity Plans take care of damages or losses done to the insured property or item, which is then compensated by the insurer after a deduction for wear and tear.
- Under a Reinstatement Plan, on the other hand, the policyholder gets an identical replacement for the damaged article, but the value and specifications of the replacement will essentially be equal to the one damaged, not higher.
- Under the New for Old Plans, as the name suggests, the insurer will provide the replacement cost to the policyholder in full for items that are damaged beyond repair.
- Agreed Value Plans means the loss will be settled by the insurance company on the value of the property or content, whichever is agreed by the insured at the time of buying the insurance policy.
Benefits of home insurance policy
The benefits and features of home insurance usually vary not only from company to company but also depend on the type of policy that you choose. For instance, most insurance policies provide complete coverage for any damage to the policyholder’s home or it’s contents from natural calamities, fire, man-made events, theft, or burglary. Valuable items such as silverware, jewelry, and expensive electronic gadgets, etc. are also covered (some policies cover jewelry and expensive article under add-ons).
Silent features of home insurance policy
No insurance company or home insurance policy covers an individual against war, invasion, rebellion, revolution, the act of a foreign enemy, hostilities, civil war, or insurrection military. Additionally, damage arising from or in consequence of a nuclear attack, be it directly or indirectly, will not be covered. Loss or damage caused by depreciation or wear and tear of a building, or property or its contents will not be covered even though it is insured. Consequential loss of any kind is also not covered in a policy. Consequence arising out of radiation or contamination by radioactivity or from any nuclear fuel will also not be covered. Losses arising due to third party construction will not be covered. Any acts of terrorism are also not covered under basic home insurance policies. And most importantly, the willful destruction of property is also never covered under a home insurance policy.
There are certain insurance policies such as one by ICICI Lombard which does not cover any damage or loss due to directly or indirectly caused due to earthquakes, volcanic eruptions, or other convulsions of nature. Also, find out from your insurer that the value of the property or cost of construction will be covered or not. For instance, HDFC ERGO under their home insurance policy does not cover any under-construction property or the cost of land.
There are certain things you can get covered if you opt for add-ons. For instance, some popular add-ons include electronic equipment cover, jewelry, and valuables, pedal cycle, terrorism cover, etc. Note that, to get these covers, you have to pay an additional amount over your home insurance premium.