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Know all about various types of home insurance plans in India, documents required and companies offering home insurance.

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Home Insurance Plans in India

Home Insurance in India:-
A house is a place that provides shelter for living and these houses are built on efforts and emotions of living souls. Unexpected mishaps can turn these happy times into disasters. The owner not only undergoes monetary loss but also loses his mental peace. An insurance to cover financial loss can reduce the stress on the individual and this is the reason why home insurance is a need (and not want) in countries prone to natural calamities.
These insurance policies not only cover damages due to natural calamities but also many other types of damages caused by fire, riots, burglary etc. There are policies that cover home contents including furniture, cloth, utensils, jewellery, etc. All these aspects have made home insurance popular in India.

Working of home insurance
1.      The Application:
  • Home insurance can insure a house and/or contents that make a home (electrical appliances, furniture etc) from loss due to any of the conditions that are mentioned in policy covers. How these home insurances work is explained below:
  • Firstly the property owner has to identify his insurance needs, including his premium payment capacity.
  • She/he then approaches an insurance provider and chooses a policy that covers his specific needs (or a policy that closely matches his requirements).
  • A proposal form is filled by the applicant and based on the value of the house structure/household items the property will be insured to certain amount and a premium will be fixed.
  • With regular payment of premiums the house structure/household items will be insured for a certain period of time. The application will be processed and based on type of damage and its valuation; claim takes place within specified period of time.
2.      What the policy covers:
In general most of the policies that are available today cover damages due to the following;
  • Fire
  • Lightning
  • Aircraft Damage
  • Explosion / Implosion
  • Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
  • Damage to property due to riot, strike, malicious and Terrorism.
  • Subsidence and Landslide including Rockslide
  • Any type of Bursting/overflowing of water installations
  • Missile testing operations
  • Leakage in sprinkler installations
  • Bush fire
  • Earthquake
  • Impact Damage
3.      What is not covered:
  • Destruction of property willfully.
  • Damages to property due to wear and tear.
  • Loss to property due to war.
  • Loss to property unoccupied for more than a certain specified period.
  • Money in the form of cash, antiques and collectibles.
4.      How the claim works:
  • For the structure of the property the value is arrived at on 'Reinstatement Value' basis. This implies that the reimbursement amount will be the cost of construction of a similar new property.
  • The contents, for which an individual is claiming an insurance reimbursement, are valued on the ‘market value’ basis. This implies that the reimbursement amount will cover the cost of buying a similar item of the same age.
  • For jewellery and furniture, the value is appropriately fixed after consulting a valuator.
5.      Documents required for claims:
Depending on the cause leading to damage the documents required to process a claim will vary. For ex: If the damage is due to naturally occurring earth quake or a quake due to other causes (blasting of Rock Mountains) a seismological report is required. If the damage is due to fire then a report from fire brigade is required. Other than documents related to nature specific damage there are few basic documents that is required for a claim. These documents are listed below.
  • A claim form is to be filled as an application to claim process.
  • FIR will be necessary if the cause for damage is applicable.
  • Photo copies of bills, replacement estimates, policy etc. 
Home insurance inapplicable:
There are certain criteria that decide where a home insurance can be provided; for this reason it is important for a person to read definition of each term in policy wordings to make sure house structure or households fit for insurance policy.
  • Age of structure/household items that has to be insured can be considered while providing insurance.
  • The structure or content of house should not be used for any kind of commercial activities in order for it to be insured.
  • Any damage to land apart from the structure will not come under policy claims therefore the valuation will be done just over the structure excluding the value of land.
  • Exclusions mentioned in the policy wordings are very important and the applicant has to be aware of these exclusions before purchasing a policy. 
Home insurance policy providers in India:-
The following companies provide insurance on house buildings/household items in India.
  • ICICI Lombard
  • Bajaj Allianz