• A home is a location that offers you protection from natural elements, and acquiring it necessitates a considerable investment. However, unforeseen occurrences, such as natural disasters like floods and earthquakes, as well as incidents like theft, fire, and malicious actions, present significant hazards to your residence. Harm to your property or its belongings can lead to considerable financial hardship regarding repair and renovation costs. Home insurance or property insurance safeguards you from financial losses resulting from damage to your home caused by natural disasters and human-created catastrophes.

What is Homeowners Insurance?

• Owning a home represents a major financial commitment, and any harm to your house leads to substantial monetary losses. Homeowners insurance is a category of insurance intended to shield homeowners from financial expenses or losses stemming from damage or destruction of their property and personal items. Depending on the coverage you choose, it encompasses a wide range of situations including fire, theft, vandalism, and natural disasters, as well as liabilities for accidents occurring on the property.

How does Homeowners Insurance Work?

• Homeowners insurance functions like regular insurance and offers financial protection against covered issues, generally through property and liability coverage. Like other policies, when you purchase a homeowners insurance policy, you pay a premium to the insurance provider and receive coverage for your chosen policy. In the event of any situations covered by the policy, you can submit a claim to the policy issuer. The insurance provider will then evaluate the damage and assess the loss. If accepted, they will provide the compensation amount up to the limits established in the policy to repair or replace the damaged property or items.

Is Homeowners Insurance Required?

It is not legally required to have homeowners insurance in India. However, it may be prudent to obtain this insurance based on the risks present in your area. For instance, many locations are susceptible to natural disasters such as floods, earthquakes, and cyclones; there are also instances of fire, theft, burglaries, and vandalism by criminals. All these factors should be taken into account before purchasing insurance. Therefore, acquire an insurance policy for coverage against Fire Accidents, thefts and burglaries, natural disasters, human-caused hazards, and damage to personal belongings.
Different Homeowners Insurance Coverages:
1. Bharat Griha Raksha
Bharat Griha Raksha is the home insurance policy that the Insurance Regulatory and Development Authority of India (IRDAI) mandates for every insurance provider to offer. This insurance cover provides protection against loss, damage, or destruction of the home structure and its contents due to risks like fire, earthquakes, floods, and other similar occurrences. Additionally, valuable items within the home can also be insured under Bharat Griha Raksha for up to 5 lakhs of sum insured.
Key Features:
• Coverage for your property and its contents for 10 years
• Waiver of under-insurance
• Auto escalation at 10% each year
• Insurance on market value for either building or contents is not allowed.
In-built add-ons:
• Terrorism
• Rental for alternative lodging
• Fees for architect, surveyor, and consultant engineer up to 5% of the claim total
• Debris removal clearance – up to 2% of the claim total

2. Home Shield Insurance
Home Shield Insurance offers comprehensive protection for your property for a duration of up to 5 years against nearly all unforeseen incidents that could lead to unnecessary stress for you. This home insurance covers the actual value of your property as stated in the property’s registration agreement. Additionally, it provides various optional covers to cater to your unique requirements.
The Optional Covers consist of:
• Escalation Option for building- automatic increase of up to 10% on the base insured sum throughout the duration of the policy.
• Costs of Relocating Residences- This includes the costs associated with packing and transporting the insured belongings to alternative accommodation.
• Emergency Purchases- It covers costs incurred from emergency purchases made by the insured.
• Electrical Failure- Provides protection for damages resulting from short circuits.
• Equipment and Valuables Coverage- This encompasses loss or damage to your valuables and equipment.
• Public liability- It offers protection in case of injury or damage to a third party that occurs due to your home.

Homeowners Insurance vs. Home Warranty

• Both homeowners insurance and home warranties provide coverage for homeowners. Nonetheless, they fulfill different functions:
• Homeowners Insurance primarily concentrates on the damages to your property and possessions caused by natural disasters and artificial factors. It also addresses any liabilities that may arise because of your property. It is crucial for safeguarding your home and delivering financial protection against damages caused by adverse events.
• Conversely, home warranties are typically service contracts that cover the repair, maintenance, and replacement of essential home systems and appliances as a result of regular wear and tear. Generally, they do not include damages from disasters or accidents but merely help to lessen costs for the operation of such items that are included under the warranty.

Conclusion

Homeowners insurance is a vital aspect of stress-free and responsible homeownership. It provides protection against a broad spectrum of risks stemming from both natural and artificial causes, which could otherwise lead to significant financial losses.

Disclaimer: The information provided above is intended for illustrative purposes only. For further details, please consult the policy wording and prospectus before finalizing any sales.