Home insurance protects a person against damages caused due to fire and other natural disasters. Opting for add-ons along with what is covered under a home insurance policy will help a policyholder to a great length, depending on their requirements. Experts say, there are various things that need to be reviewed in a policy, including add-on covers.
Neeraj Prakash, MD, Shriram General Insurance, says, “Add-on covers help policyholders in additional areas where the home insurance policy might not work. This is a must as certain things that are not covered with a basic policy can get covered with add-ons.” However, before choosing a home insurance add-on, make sure it is applicable to your needs and circumstances and adds value to your home insurance cover.
Why should reviewing home insurance be part of your year-end financial checklist?
First of all, one needs to check if one has home insurance or not. If not, this should be one of the checklists for the coming year. Industry experts say, home insurance comes at affordable premium rates and provides support in case of any crisis.
Adarsh Agarwal, Appointed Actuary at Digit Insurance, says, “Individuals should also be aware that the insurance policy sold along with a home loan covers only structure and doesn’t cover the contents. So essentially it is Fire insurance and not Comprehensive Home insurance per se. Appropriate disclosure of all contents and their appropriate value is important, else under insurance would apply and claim payable will be far lesser than actual loss.”
Additionally, check if breakdown insurance is included or not and if yes, find out what is the maximum age of equipment which is covered in this. Once taken for one year, the benefits can be claimed throughout the year and will not incur any changes unless the policy expires.
What are the things to keep in mind while reviewing your policy?
Evaluate all future risks of your house, and then decide the house’s coverage. From floods in Bihar, to torrential rains in Maharashtra, Gujarat and Karnataka, and a series of cyclones lashing the eastern Ghats of the country, the year 2020 witnessed a series of natural disasters. Additionally, the recent cyclone, Nivar, has also led to property damage in parts of Tamil Nadu and Puducherry.
A comprehensive home insurance policy can come in handy especially when a natural disaster strikes, to tackle the losses. Prakash of Shriram General Insurance says, “One should be particular about the sum insured and ensure that all the items are covered.”
Will your home insurance rates be impacted after a review?
Experts say, home insurance is often underestimated by most but is an important contingency plan to have in place. Tenants can also cover their valuables and household items kept at home. Most add-ons are not covered under a home insurance policy. So, to get the add-ons, you will have to pay an additional amount over and above your home insurance premium. Hence, experts suggest to opt for a householder’s package policy, as it offers comprehensive coverage. Note that, add-ons increase the premium that you have to pay.