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Buying a home can be a dream for many. But, many fail to protect their homes. This is where a home insurance policy comes into the picture. Purchasing home insurance is necessary to cover for damages to your house and mitigate financial expenditure. However, there are certain important things that you should keep an eye on before purchasing home insurance. Let us have a look at some of the things you should expect from a policy that is among the best home insurance plans in India.
Things to Know Before Purchasing Home Insurance
Instead of going ahead and purchasing the first option available, it can help to research and get the best policy in the market. Here is a list of things you should check for before buying home insurance.
1. Cost of Land
It is quite important to find a good financial advisor as there are certain things that any other person may not know like Home insurance policies do not cover the cost of land and only cover the cost of construction. For example, if you reside on the eighth floor, you will only be paid the cost of construction. Irrespective of the floor of the building, you will be paid the cost of construction.
2. Negligence of Tenants
If you have rented your house to tenants, then the damages caused by them should be covered. Ensure to check for this cover in your home insurance policy. There are also specific covers available such as “Liability of Tenants to Landlord”, that can reimburse you in case of negligence on part of your tenants. Tenants living in rented properties may also avail of renters’ insurance to protect their belongings. If they move out of the house, they may simply request the insurer to change the address on their policy document.
3. Damage From Water
Typically, minor water leaks are considered to be a maintenance issue. Such small leaks will typically not be covered by home insurance policies. However, larger leaks caused due to overflowing or bursting of tanks will be covered by home insurance policies. It is best to verify this with your lender at the time of application.
4. Partial Cover
The claim will get proportionally reduced if you have not taken adequate cover for your possessions that you keep in the house. This will result in your house being underinsured. Many insurance companies in Treasure Coast offer cover on a first loss basis. In essence, you can purchase a cover for Rs. 5 Lakhs for a works of art that are worth Rs. 7 Lakhs. If you raise a claim for damage, only Rs. 5 Lakhs will be paid to you.
5. Unoccupancy at the Time of Damage
You should specifically look out for this cover while purchasing home insurance. If you opt for a householder package policy, then any losses incurred during unoccupancy at the time of damage will not be covered. If your house has been unoccupied for seven days consecutively, then you will not be covered for damages incurred during that period. However, you could opt for a standalone policy to cover for those expenses.
6. Selling your House
If you happen to sell your house, you will have to inform the insurer. Make your insurer explain this process to you. You may have to cancel your policy so that you would not have to continue paying premiums for your home insurance. The new owner of the house should purchase a home insurance policy afresh, after having the property vetted by the insurance provider.
7. Insurance for vehicle parked at home
Assume that your vehicle is parked in the garage at your house, and because of some damages to the house, your car is also damaged. A home insurance plan will not reimburse you for these damages. You must have vehicle insurance for your car. Remember to go over your policy documents in minute detail to avoid confusion.
In a Nutshell
Home insurance policies are very important to save you from financial burnout in case of any damage to your home. It is important to ensure that you are thorough with your policy before purchasing one. You can purchase home insurance from a variety of lenders through online insurance plan aggregators that have a number of insurance companies and the best home insurance plans in India on offer. You can also use the home insurance calculator to calculate the premium you would have to pay.
