Have you considered insuring your home and things in it?

Home is one of the most expensive assets most of us have.

What is the value of a home today?

• If it is a comfortable 3BHK - Rs. 2.5 crores to Rs. 8 crores (location-wise)

• The cost of interiors and furniture - Rs. 15 lakhs to Rs. 1 crore (preference wise)

• Emotions attached to the home - priceless.

Well, nothing can compensate for the emotions but any financial damage can be compensated by the help of insurance. Devastating earthquakes, cyclones and floods are not the only risks that your house is exposed to. The mushrooming of high-rise buildings and the growing use of gadgets and appliances have increased the risk of fires. According to one estimate, Mumbai witnesses more than 5,000 fire incidents every year, and 70% of these are caused by electricity. Both Delhi and Bengaluru record about 2,500 fire incidents in a year. “Fire incidents are on the rise because the use of electrical and electronic gadgets has increased the load on electrical wiring, especially in high-rise buildings,” says Arora of ICICI Lombard General Insurance.

You wouldn’t want all the money, time, and effort that you invested in turning your house into a home to go to waste because of some uncertainties!

A customer in Bengaluru had taken a home insurance cover from Go Digit Insurance for their triplex villa located in a posh locality in Bengaluru. During the floods last year, nearly all the 58 villa properties of the residential society were submerged when a nearby lake overflowed and resulted in blockage of the main drain. The water stagnated for three days causing severe damage to the villa property valued at ₹10 crore. The floods caused severe damage to structures, doors, fittings, furniture, and electrical appliances, among others. The assessed loss of the claim stood at ₹45.7 lakh, which was paid by the insurer.

Here are 3 reasons why you should get your home insured:-

1. It Insures Against Manmade Risks that Can Cause Extensive Damage

Manmade threats have now become more recurrent than ever, and sadly, robberies, thefts, riots, strikes, terrorism, etc., pose a great risk. A Home Insurance Policy not only covers your house as an architectural structure, but it can also cover everything within the premises.

One can protect all the contents of the house like jewellery, furniture, artefacts, and electrical appliances, among others even for the person living on a lease. This especially makes sense to renters who would otherwise not want to take full home insurance, but only cover their contents.

One can also take add-on covers for enhanced protection. For example, one can take an additional living expense cover and get reimbursed for expenses related to hotel stay, storage cost of household items or any movers and packers used for alternate accommodation.

2. It Also Protects You from Natural Disasters

Natural disasters are synonymous to a homeowner’s nightmare. You can take a structure-only cover to protect your home from natural calamities like earthquakes, floods, cyclones, storms, etc.

Natural catastrophes in India have led to uninsured economic losses of $32.94 billion (Rs 273,500 crore) during the five period of 2018-22, indicating the low insurance penetration in the country, global insurance giant Swiss Re said. Insured economic losses during the period were just $1.10 billion (Rs 9,130 crore) as 93 per cent of exposures were uninsured, it said.

3. It Isn’t All That Expensive

One crucial misconception that we deal with on a daily basis is that home insurance is expensive. Contrary to that, it is quite cheap. Generally, the premium for a ‘building only’ cover for a house costing Rs. 80 lahks can cost Rs. 1,680-1,800 per year, or Rs. 4.60-4.93 per day. A comprehensive cover for the same sum insured may range from Rs. 2,800 to Rs. 3,000 per year (Rs. 7.67-8.22 per day). With add-ons for equipment and household items, premiums won’t be more than Rs. 15,000-20,000.

If you are thinking what kind of policies are available, then here are some policies:

1. Bharat Griha Raksha: It is a home insurance cover that provides coverage against loss, damage or destruction of the home building along with its contents against the risk of fire, earthquake, flood and other allied perils. In addition, the valuable content of the house can also be covered under Bharat Griha Raksha for up to Rs. 10 lakhs or 20% of the Sum insured.

2. Home Shield Insurance: Home Shield insurance provides a comprehensive cover for your assets for as long as up to 5 years from virtually all the fortuitous events. HDFC ERGO Home Shield Insurance covers the real value of the property as mentioned in the registered agreement of the property and it also offers optional covers to personalize the plan to meet your unique needs.

3. All in One Home Protector Insurance Policy: : It is offered by Iffco Tokio General Insurance. It covers natural calamities, manmade events, personal liabilities, home equipment damage, jewellery items are also covered. It also provides loan payment protection.

Having your home insured offers the peace of mind. A multi-year policy saves the buyer the trouble of renewing it every year, locks in the premium amount for the future, and even takes care of inflation by way of 10% annual increase in home building cover. Keep in mind that insurance companies value appliances, gadgets and other items using the standard depreciation formula. The value of the item keeps reducing over the years. So an electronic item bought for Rs.50,000 two years ago will now be worth only Rs.20,000-22,000.

As a financial intermediary, our role is to make available all instruments that are essential to protect your assets and grow your wealth. If you need help finding the right policy, please do revert.

We are looking to impact the lives of 2,500 families this year in their investment and insurance journey.

Warm regards,

CA Tejas Lakhani

Fincare Services
From Wealth to Joy, We Bridge the Gap.