Home Insurance: A boon to home-owners

In India, Home Insurance is rarely mentioned in any discussion around protection or investment. This is surprising considering that India is highly prone to natural disasters. 60% of its land area is prone to earthquake and 9% to cyclones, hurricanes and floods. One sees everyday in the press and Media, news about accidents that have hurt the structure of a home. And, unfortunately in the last decade or so, India has consistently been on the radar of terrorist strikes.

The resulting damage can have varying levels of impact. While fires can damage the insurancefurniture and carpentry, water seepage from pipe-bursts can hurt the ceiling and walls. Earthquakes, bomb – and gas cylinder – explosions can cause cracks in beams and columns necessitating a reconstruction.

Yet, home insurance is given very little importance in India considering the extent of construction that exists, or is happening everywhere. One of the wrong perceptions is that it’s expensive. On the contrary, it’s actually the cheapest among all forms of insurance. The cost roughly comes up to Rs. 50 per 1 lakh of the cost of reconstruction of the property, or roughly between Rs. 1500 to Rs. 3500 of premium every year depending on the area of the property. For damage to contents of the home worth Rs. 10 lakhs, the annual premium costs Rs.250.

Yet, both these are quite comprehensive and cover: fire, lightning, storm, flood, landslide, earthquake, vehicle impact, rioting, arson, pipe bursts, tank bursts, burglary and breakage. One can also enlarge the cover to include terrorist acts and damage from appliance use.

Remember, the resale value of your home can fall drastically if it has incurred damage any time. In contrast, the premium to be paid to insure oneself aganst such an eventuality is a pittance!

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