You think you don’t need home insurance. Your home thinks otherwise.

Featured 24 Jun 2017

Locks give you great assurance. As you step out of your house, feeling positive and in good spirits, you bolt the door, turn the key and walk away comfortable in the sense of security. What are the chances, you think, of something going wrong? Quite minuscule right? Because you only hear about accidents and disasters and burglaries in the news. It’s something that happens to others.

Well, you could be in for a surprise. A rather unpleasant one.

Imagine you returning home, opening that “secure” lock, only to find the window is broken. Now, you are missing your TV, your laptop, even the jewellery you “safely” tucked away in the locker.

“Why me” is a question that immediately pops up in your mind. The next one is “Why didn’t I”? “Why didn’t I take home insurance”? You know it’s too late to act now. A classic case of closing the door after the horse has bolted. You only regret a decision you didn’t make, after an unforeseen event has happened.

That’s why, the odds being low or chances being scarce is a delusional sense of security we envelop ourselves in. If there IS a chance, however low, you HAVE to be prepared for it.

Think about it. How much does your phone cost – the phone that you protect with everything you can? Now let’s think about how much your home is worth.

If you are not sure how to find out the total value, worry not. It is a simple calculation, but an important one.

Now let’s say that you live in a 2BHK apartment.

Here are the contents (furniture, gadgets, appliances, etc.) that are commonly found and their average costs

1 double bed: Rs. 25,000

1 single bed: Rs. 10,000

Sofa set: Rs. 30,000

Dining table and chairs: Rs. 20,000

32 inch TV: Rs. 15,000

Double door Refrigerator: Rs. 20,000

Washing Machine: Rs. 15,000

1 Split AC: Rs. 12,000

1 Laptop: Rs. 40,000

Microwave oven: Rs. 10,000

Wardrobe: Rs. 20,000

Music System: Rs. 5000

So, now if you just add all of them, you will get the total value of your home. Here we see, the 2BHK is worth more than 2 Lacs.

Would you still not think about protecting it?

If the logic doesn’t convince you, maybe statistics will. Out of 100,000 households, 600 are burgled every year globally. And a majority of these break-ins happen during festive season, when the occupants are away celebrating the holidays. So now, think what are the chances of your home being one of the 600? The odds might be low, but they are not zero. Are the valuable possessions and belongings in your house worth taking the chance?

Considering everything, it’s really a no-brainer that you should get a home insurance – irrespective of whether you own the house or have rented one. And if you generally keep jewellery at home, while on a vacation, it is only logical to take home insurance.

Let’s dig deep into what it really is.

So, what’s home insurance?

A home insurance protects your home and its belongings in the event of unfortunate happenings like burglary, accidents, disasters etc. You can buy a suitable plan for home insurance. The plan types allow you to insure just the building, or the contents of your house, or both as a comprehensive plan.

What’s covered?

Apart from the building, you can secure valuable contents of your house against burglary/damage including furniture, home appliances, electronic items, jewellery, etc.

Coverage against burglary

Just like movies, robbers can always find a way in no matter the security. Especially, during festive season when houses are very vulnerable. So, when you apply for a home insurance, declare the valuables for which you wish to seek the coverage. In the event of a burglary, you can claim the cost of replacement.

Coverage against accidents

Imagine, it’s the festive weekend and you’re chilling at home with friends. Just then, a rocket decides to drop in from the window and, before you know it, your house is on fire. That’s an accident where you wish you had home insurance, which would have covered all your burning losses. That’s not all, some policies offer a third-party add-on, which cover the belongings of guests or relatives who are visiting you.

Coverage against natural disaster

We can never guess what nature has in store for us. But we can certainly plan for its occasional fury. Your home insurance will cover your home and its contents against natural disasters such as floods, tsunami, earthquake, cyclone etc. Remember one thing before buying cover against natural disasters – study your location and choose the disasters your home is most vulnerable against.

Coverage Cost

You may wonder how the coverage cost works. Mainly, it has two parameters – value of building and value of contents. Value of building doesn’t really mean the market value of your property, it is an optimum coverage needed for the reconstruction post a damage. For example, if your damaged area is 1200 sq. ft. and coverage cost per sq. ft. is Rs.2000, then you get Rs.24,00,000. Then there is value of contents, the coverage cost of the contents depends on their individual value. So, the rate stated on the insurance papers will be the cost of replacement.  

So, now if logic has busted the myth that you don't need home insurance, you will not leave your home unprotected while you are away on a vacation. Gift your home an extra layer of protection.