Why You Should Buy Home Insurance



Why You Should  Buy Home Insurance

Just like car insurance, life insurance and health insurance, Home Insurance is as important .

If something were to happen to your house tomorrow, your world could come tumbling down. To safeguard your house from natural and man-made disasters, it is imperative to insure your property.

Situations like fire, quake , burglary or destruction of house due to riots have become quite common of late .

Therefore, the need for  home insurance can’t be stressed enough as there is nothing worse than regretting in hindsight.


Most parts of our country fall under earthquake -prone seismic zones. Thus, it becomes all the more important  to insure against natural and man-made calamities.

Quake Prone India
Quake Prone India


What to look for while choosing Home Insurance ?

  • Premium Amount: You can seek quotes from  individual insurers or use comparison charts to compare premiums


  • Claim settlement Ratio: It is most important to check claim settlement ratio of the insurer while zeroing in on insurance. There is little point in going for lowest premium if the claim is not settled eventually.


  • What is NOT covered: It is as important to know what is NOT covered as what is covered to avoid disappointment later on. Read the brochure carefully, poring over each point and making a note of the same.


Company:  HDFC ERGO  (General Insurance Company)

Web: https://www.hdfcergo.com/


  • Policy protects home structure as well as household contents.
  • Covers risk against fire, lighting, explosion flood , inundation , storms, riots, strike, aircraft damage, cyclone, volcanic eruption, earthquake , terrorism (optional), burglary, theft etc..
  • Cover for 1,2,3,4 and 5 years



How Much To Insure ?

The sum insured for the structure of the house is based on the reinstatement value. In simple words, it is the reconstruction cost. This does not include cost of the land. Reconstruction cost is based on two parameters:

  • Built-Up area of the house (sq. feet)
  • Cost of construction/sq. feet in your locality/area.

Multiply the built-up area of the house with the cost of construction to arrive at Reconstruction Cost

That is  Reconstruction Cost = Built-Up area* Cost of construction/sq. feet

For details, Please refer product brochure given by respective General Insurance Company.


Important Points

  • An entire society cannot be covered under this product.
  • Below properties are NOT covered:
  • Property under construction
  • ‘Kutcha ‘ construction
  • Residence-cum-office properties
  • Residence-cum-shop
  • Land

I shall compare a few home Insurance policies in a separate post for your reference.




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