In recent years, an increasing number of people have realised the importance of having a house insurance plan. Buying a home in today’s times of expensive realty is challenging enough. Add to that the ever-increasing costs of home renovation, repair and restoration, and you realise just how tough it is to keep the home in good working condition. Home insurance protects your home from any untoward mishaps that can ruin its structure and damage its contents. It covers a range of eventualities, from a short circuit fire to burglary. However, there are many myths associated with house insurance. The 5 most common ones are –
Home insurance does not cover damage due to natural calamities
While many house insurance plans in India today offer separate riders to account for damage to the house arising from natural calamities, the leading companies in the country do. Take a look at the policy information to know what’s covered and what’s not. The top rated home insurance policies today cover damages arising from floods and fire as well. The policy pays for repairing and restoring the home after such a damage.
It pays only for repair and restoration.
This is not true, Home insurance protects not just the home but also its valuable contents1. When taking the policy, the insurer will make a list of valuable items in the house as per their prevalent market rates. Valuables comprise expensive electronic appliances, jewellery, art work, etc. The valuation estimate is shared with the customer, and the final sum insured is arrived upon based on this estimate and the value of the house. If the valuable items are lost or damaged, the insurance policy pays to replace the same.
You don’t need home insurance if you have term insurance
First off, home insurance is a separate insurance category than term insurance. Term insurance is a life insurance policy that pays a big sum insured amount on the unfortunate demise of the policy holder (while the plan is still active)1. While the term insurance money may certainly pay for repairs and restoration of the house, it is better to have a dedicated home insurance plan that takes care of the house.
Home insurance also repays the home loan
No, it does not. Home loan insurance is a separate insurance product than home insurance1. Under the former, the insurance policy pays the balance unpaid loan to the lending institution in case the borrower passes away before repaying the loan in full. Meanwhile, the home insurance safeguards the home and its contents. Thus, both insurance products are different from each other, and have different uses.
All home insurance plans are similar
No, it does not. Home loan insurance is a separate insurance product than home insurance1. Under the former, the insurance policy pays the balance unpaid loan to the lending institution in case the borrower passes away before repaying the loan in full. Meanwhile, the home insurance safeguards the home and its contents. Thus, both insurance products are different from each other, and have different uses.
