What are the types of home insurance coverage?

Pick up a local newspaper or browse through a news portal and you are definitely going to find reports like “property worth lakhs damaged in a fire” or “roof collapses during a thunderstorm”. These are not once-in-a-while incidents, property damage due to calamities, accidents or other reasons is common in India. Though absolute figures are not available, it could be safely said that property worth hundreds of crores get damaged every year.

When a factory or a warehouse is damaged, the loss is primarily material. But when a house suffers damage, or in extreme conditions, gets completely destroyed, the damage is material as well as emotional. One loses his/her personal belongings, furniture, and documents but more importantly, a place full of memories. The emotional loss in the event of loss to your home cannot be compensated, but home insurance can take care of the material loss. Depending on the needs of the homeowner, there are two main types of home insurance with different modifications.

Fire Insurance

A standard fire insurance policy covers your house against any unforeseen damage or loss caused due to fire or other incidents covered under the policy. It is one of the most popular home insurance options as it covers a wide variety of perils other than fire. A fire policy also covers damage or loss due to lightning, earthquake, rioting, aircraft damage, loss due to missile testing and other natural and man-made calamities. A standard fire insurance policy generally covers damage to the structure of the building that includes permanent fittings like ceiling, etc. The fire home insurance policy also extends to garages and outdoor rooms or sheds built with the house.

Some fire insurance policies also cover damage caused to guests or a third-party present in the house. While a fire insurance policy covers a host of perils, it also excludes certain events. A fire insurance policy does not cover damage due to war or war-like situations, nuclear damage, electrical or breakdown and burglary.

Getting home insurance for cover against fire is very easy and convenient. You can buy Bajaj Allianz Home Insurance policy, with protection for the structure as well as the articles of the house, on Finserv MARKETS. The application process is swift and requires minimal documentation, while claim settlement is prompt and hassle-free.

Burglary and Theft Insurance

A standard fire insurance policy does not cover incidents of theft, dedicated insurance for burglary has to be taken to protect your home against housebreaking. A burglary house insurance policy protects the contents of your home against theft. The fire insurance generally covers the structure of the house, but the contents like furniture and art pieces can be equally expensive and require protection. In some cases, burglary insurance also covers cash or valuables kept in locked safe or cash box. Along with the damage caused to the contents of your house, burglary insurance covers the damage caused to the property by burglars. However, you have to buy an adequate cover to get complete compensation for loss to the premises. The home insurance policy compensates actual damage to the property, subject to the sum assured. If the sum assured is not sufficient, the home insurance policy pays a proportionate loss.

Burglary insurance is of critical importance for tenants and landlords. As a tenant, one rents a flat or a house, but fire insurance that covers only the structure would have little relevance. Burglary insurance covers the content of the house, which are generally owned by the tenant. On the other hand, landlords sometimes rent out furnished residential units which have contents owned by them. Moreover, there could be multiple families residing on different floors of the house. A burglary home insurance provides specific cover for the contents of the unit owned by you. Along with the damage to your content due to theft, insurance for content will also cover damage or loss due to fire and other perils.

Conclusion

There are two types of home insurance based on the cause of damage. But the loss can be substantial in any of the cases, which is why a comprehensive home insurance policy is important. With Bajaj Allianz Home Insurance, you can get coverage for the structure of the house along with the items inside under a single plan. The Bajaj Allianz Home Insurance policy, available on Finserv MARKETS, can be bought through a simple online process.

       

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