Primer: All about Home Insurance

Home insurance policies are offered by general insurance companies to cover your home against risks from natural calamities such as fire, floods, earthquakes, or landslides. Besides, there are various sections of the policy that broadly covers the structure of the house alone, or your belongings, such as jewellery, furniture, electronic appliances, etc, or even both. Some policies also cover your rent expenses if you have to move out to another house because your actual house has been damaged due to any of the covered perils listed by your insurer.

Calculating the Sum assured

Sum insured is calculated by multiplying the builtup area of your home with the construction rate per square foot. For example, if the built-up area of your house is 800 sq foot and the construction rate is Rs800 per sq foot, then the sum insured for your home structure should be Rs6,40,000. Most insurers give details of construction costs on their websites.

Premium Costs

The premiums fall in a wide range depending on a variety of factors related to the size of the home, geographical location, type of construction, jewellery and other valuable possessions in the house. For example, if the cost of your house is Rs60,00,000 and the cost and the market value of other possessions such as furniture, appliances, gadgets, jewellery add up to Rs12 lakh, the premium will be about Rs5,000.

Claim Process

Inform the insurance company or your agent immediately in case you need a claim. Submit a written claim document to the insurance company within the period stipulated. This claim document should contain a detailed account of the articles lost/damaged and the actual value of each article. Then your claim request will be sent to the company's claims department. The insurer appoints a surveyor who will submit the final survey report (FSR) along with the documents submitted by you. On receipt of the documents, the claims department processes the claim. On approval of the claim, a letter is sent to the insured stating the approved amount of settlement along with the discharge voucher.