What you should know about home insurance policy

Yashish Dahiya

If I were to ask you to identify your most prized possession, what would it be, keeping aside people, pets and even your intellectual property? Undoubtedly, it has to be your house, given that you spend your entire life’s savings on buying, renovating and upgrading a house. And this is perhaps the driving force for most of us to buy a home insurance policy. Needless to say, we don’t wish to be in a situation where we have to spend a fortune repairing our house in the event of any natural or man-made disaster.

Now, what if I were to tell you that your house is not the only prized possession covered under home insurance policy? Did you know that your house’s contents such as jewellery, furniture, artefacts and electronics etc. are as much a part of this policy as its physical structure? Clearly, there is more to home insurance policy than what meets the eye.

Let’s look at what it has to offer.

Your home insurance covers more than structural damages. Typically, home insurance policy includes three basic components — structure, liability and belongings.

The structure component covers your property against any damage to the physical building, its roof, walls or garage due to natural and man-made disasters such as fire and allied perils, falling objects, riots and even bursting of pipes. However, protecting your house against acts of terrorism or rental for alternative accommodation are usually categorised as optional and needs to be specified separately at the time of policy issuance.

Damages caused due to termites and pests are excluded from home insurance policy.

Liability clause offers coverage in case of accidental death, injuries or damages to third parties such as neighbours, visitors or even domestic help. For e.g. if one of your flower-pots flips over an individual passing by or a car parked below, they can file a claim. To protect against such scenarios, a good home insurance cover with sufficient liability limit is a wise move.

Your personal belongings (or personal property) are insured against damages caused due to fire and allied perils or even theft. Personal property constitutes not only the daily items in your home but also assets that require special coverage owing to their higher value.

Did you know that household policy insures your jewellery while kept, worn or carried anywhere in the country? However, it is subject to the value declared in the insurance agreement. Most policies have a limit on the jewellery insured; hence, it’s better to insure them to their full value. Since the value of silver and gold fluctuates time and again, it's important to monitor that you're not under-insured.

Therefore, have your jewellery revalued even though it means an additional cost to your pocket.

Household insurance also has provisions for loss or damages to your furniture: Your furniture is insured against loss or damage arising from fire, smoke, theft, flood and escape of water or oil. It is essential to invest adequately so as to cover the replacement value of the furniture in your home. This also includes built-in components such as kitchen units.

Did you know that household insurance adequately covers your personal computer and laptop as well? Your home insurance covers your insured personal computer and laptop against damages caused by fire, riot and strike, terrorist activity, theft and accident within the stated geographical limit. Most policies have limits on how much they'll pay for computer hardware components, so you may not be reimbursed in full. Further, if your laptop is a business property, you may get no coverage at all.

It also covers your electrical appliances against mechanical/ electrical breakdown: Homes today are filled with various gadgets and appliances — from washing machines and dishwashers to refrigerators, microwave and TV sets. There is a sense of relief knowing that they are well insured in case of fire and allied perils, burglary, house breaking or theft, breakage due to accidental external means, mechanical or electrical breakdown.

Let’s not forget works of art, curios, and paintings: Your art work, curios and paintings are insured against natural and man-made disasters. Their insurance cover runs along similar lines as “jewellery”.

Your home is your most valuable investment. It is your prerogative to protect that investment. Just as each home is different, so is your insurance policy. Having the right amount of insurance for things that you own is really important. Make sure to insure your house and its belongings for what they’re worth.

The author is CEO & co-founder, Policybazaar.com. The views expressed in this article are his own