How is Home Insurance Premium Calculated

How is Home Insurance Premium Calculated

08 Jan 2020
70 Views

Our home makes up a huge part of our identity, which is why it is difficult to imagine that something unfavourable could happen to it. However, there are a number of factors that are out of our control and could cause damage to our houses and the things we cherish within it. Houses and household items can be damaged due to a natural disaster, such as an earthquake or flood, or a man-made one, such as a burglary or a riot. In such a case, the right home insurance coverage would provide you with the much-needed compensation to minimize your losses and help you rebuild your residence.

If you want an absolute home insurance coverage in the market to safeguard your home, you must avail the home insurance policy on Finserv MARKETS. With a Claim Settlement Ratio of 93% and tenure periods ranging from 3 months to 20 years, the home insurance policy on Finserv MARKETS promises to be both dependable and flexible.

Important Points to Note

Home insurance plans prove to be the most definite and favourable way for you to help protect your residence and any damages to it. That is why your home insurance premiums are essential in safeguarding your home and providing you with much-needed peace of mind. However, there are a few quick points you must keep in mind before applying for a home insurance plan:

  • Keep in mind that you can avail home insurance coverage if you personally own the house and also if you are currently renting and residing in it.
  • The home of your dreams might be currently a project in development. While it is understandable to want to safeguard a future house, home insurance cannot be availed for a property under construction.
  • Only Pucca constructions are covered under home insurance plans.

Factors that affect your home insurance premiums

Now that you know the importance of paying your due premiums to help keep your home insured, it is essential to know the various ways in which that premium amount is calculated. With help of home insurance calculator now you can calucalte your home insurance premium online.

It is said that “there is no place like home”, and indeed, no two homes are completely alike. From the way they are constructed to the variety of contents placed within them, every home is as different as it can be. These wide differences in the types of homes means that home insurance plans do not follow a one-size-fits-all approach, but rather have to be customized according to factors specific to the home and the choices of the individual who wants that home insured.

A home insurance provider will be able to offer you the same benefits across the board, but because of the difference in your homes, the premiums for your home insurance plan might be different than someone else’s. The difference between these premiums are based on certain considerations by the insurance provider, since they have to determine the risk factor for ensuring homes. Some of these factors affecting your home insurance premiums might be out of your control, but others might be determined directly by you.

To get a better understanding of how home insurance premiums are determined, let us take a close look at some of the key factors:

  • Type of coverage availed:

The term ‘home insurance’ simply boils down to the idea of having one’s home insured. But in practice, home insurance comes in a variety of plans and coverage types that you can choose from.

It can take several years and a lot of hard work and effort to construct one’s own home, and yet unexpected elements like fire or natural disasters can leave behind minor or major damages. Therefore, when applying for home insurance, you can opt for an insurance plan that covers the house structure, where you can file a claim in case of any structural damage to your house. This covers any wreckage sustained by the walls, ceiling, roof, doors and windows as well as any damages to the plumbing or electrical systems within the house.

On the other hand, a home is made up of more than just its construction. In every home, there are an assortment of items of pride, memory and convenience, that are unique to each homeowner. Therefore, for your home insurance, you can opt for a plan that provides coverage for the contents placed within the house, at the time that the house is damaged. In case you are renting a house, all that belongs to you are your possessions that help turn the house into a home, which is why home insurance for household articles is a must for every tenant.

A third type of home insurance plan combines both of the above and provides coverage not only for the structure of the home but also for all that is contained within it. Based on which of these types of home insurance plans best suit your needs, your insurance premium is determined. Naturally, since the home insurance coverage plan that combines both the structure and items provides the most comprehensive security for your home, the premiums for this plan are higher than the other two.

Hence, if you are looking for the right home insurance provider with all these options, you need to look no further than the home insurance plan available on Finserv MARKETS. Based on your needs, they provide you the excellent option of choosing from their three types of home insurance plans: Home building (structure), Household articles (content) and the combined Home building and household articles.

  • Type of home insured:

As mentioned above, home insurance does not work the same way for all homes. There are a number of aspects about your home that would go into the assessment of the home insurance application and ultimately decide your premium amount. These factors largely revolve around the value of your home as well as the risk factor involved in insuring it.

The value of your home is determined by a number of factors such as the type and quality of the building. These factors help determine the overall cost that it would take to replace or reconstruct your house. Therefore, this cost is carefully assessed by the insurer since it constitutes the coverage you would receive if your house were to be damaged. For instance, if your home is a high-end luxury apartment, the cost of replacing it would be much higher than if it were in a common neighborhood. As a result, your home insurance premiums will be higher as well and vice versa.

Meanwhile, the age and overall condition of your home also plays a part in your premium amounts. For instance, newer houses and houses with proper safety measures are less likely to be damaged and therefore, are less likely to pose a risk factor for insurers. Hence, if your home fulfills criteria like these, you might be likely to pay a lower premium than others.

  • Value of contents:

In a similar vein, if you opt for a home insurance plan that provides coverage for the items in your house, the value of those items will affect your overall premiums as well. This can include a wide range of items, from clothes and utensils to furniture and home appliances to even jewellery. Therefore, the more valuable the items that are covered, the higher the home insurance premiums.

  • Tenure of insurance:

Your home insurance premiums also greatly depend on the overall tenure of your insurance policy. Typically, when it comes to something as essential as home insurance, it is advised to be on the safe side and opt for a longer tenure. This is because long-tenure insurance policies tend to be far more beneficial and economical in the long term than availing home insurance for short periods of time.

At the end of the day, we want to provide the absolute best insurance coverage to protect both our homes and the future of our families. Which is why it is essential to find a home insurance policy that provides comprehensive insurance coverage as well as fair and economical home insurance premium amounts.

This incredible combination of benefits can be found with the home insurance plan on Finserv MARKETS. With an extensive coverage of up to Rs. 1o crore and truly affordable premiums, this insurance policy is perfect in every sense. Moreover, with their Claim Settlement Ratio of 93%, round-the-clock support and hassle-free online application process, the home insurance plan on Finserv MARKETS makes safeguarding your home easier and more convenient than ever.

 

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.