A sense of satisfaction and comfort arises as soon as you enter your house. Your dream home is a place where you relax and wipe out your mental tensions. But have you given a thought that the home which you built or purchased with a lot of efforts is prone to risk of certain events? More often than not the answer is No! People live in a house but the precautions that need to be taken are ignored quite often. Only some are proactive while a large mass is still ignorant of causalities. It is necessary and precautionary that house owners cover their assets.
The house is prone to certain kinds of contingencies:
Some events that are out of your control and can bring huge losses to your home include Natural calamities, Fire, Earthquake, Tsunami and Terrorism, to name a few. Now the damage due to these events are not restricted to your home only, it clubs with it the household belongings. Your electrical appliances, Furniture and valuables can be lost in quick time along with your abode. The expenses to rebuild these things are enormous and next to impossible for middle class in today’s time. It is therefore necessary that you get a protective shield against such events.
What is the householder’s policy?
Householder’s policy saves you from uncertain events and provides you risk cover for your home.
for household items and for a house is a sensible option. These covers can be of few types and can be taken as per capacity of the person and effectiveness of the policy. The premiums differ from scheme to scheme.
This type of householder policy covers the entire structure of the house and any damage to the same. If your house gets damaged due to unforeseen event, the insurance company can bear the amount of expense. Individual policies can be taken in case of a house that was built after purchasing the land. In case of multistoried apartments, policy is taken by the society. However, in case such society does not have the insurance, a person can insure his own flat. In case the building collapses, the person who has cover for his house will get the loss amount.
In case the house gets damaged by natural calamity and the insured has to live in rented premises, then the rent paid by the insured till the house gets repaired, is repaid by the insurance company.
The householder’s insurance policy takes care of both house damage and to household valuables like furniture, jewelry, electronic appliances along with losses due to theft or pilferage.
Home insurance policies available in the country offer insurance on the basis of reinstatement value of property and don’t take the market value into account. The reinstatement value means the expense that will be incurred to rebuild the property at current cost. Market value includes location, construction cost and land value of the location. This means that the sum insured in the householder’s policy doesn’t take account of land value and location.
How the sum insured is calculated?
The sum insured is calculated on the basis of per square foot cost of construction multiplied by built up area. Insurance company calculates the value of household things like furniture, electronic gadgets and clothes after deducting the depreciation.
Replacement value Vs Depreciated value:
Replacement value is the cost of your product in the market while depreciated value is the worth after the amount of depreciation is charged on the product. A person has the option to either insure his product on the basis of depreciated value that will cost him less premium or he can take cover on the replacement value, which is the sum you will have to pay in case you purchase a similar product in the market.
What is not included?
Always make sure that you check all the exclusions in the policy. Make sure you are aware of all the factors because the whole purpose of the exercise is that one gets a cover. Ignorance is dangerous as you can lose your belongings and asset and also end up getting nothing from the insurance company. Always learn the exclusions before taking a policy. Some companies do not cover willful destruction of property or loss or damage due to wear and tear. In most of the cases, insurance amount is not cleared in case the house is unoccupied by the owner for a period of thirty days without notice or intimation to the insurance company.
Premium paid differs from company to company and depends on the condition of the property insured but on an average, charges are Rs 60 to 65 per One Lac Rupees.
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