Feel At Home, With Insurance

Best ways to secure your house from natural and other calamities.

- Renu Yadav

A house is one of the biggest investments of one’s lifetime. But an unpredictable natural calamity, like the recent floods in Kerala, can destroy your prized possession and leave you staring at an uncertain future. Things worsen if one has serviced a home loan. No wonder experts say insurance for your house is a must-have.

A basic home insurance policy provides cover against calamities, such as riots and fire. Some include burglary and theft, while others offer these as add-ons. One can even take cover against terror attacks. Broadly, there are three kinds of covers—only for the structure, for the structure plus contents and just for contents. In ‘structure only’ covers, land is not covered, though Bajaj Allianz has a policy that also covers land. The cover is calculated by multiplying the area of the house with the cost of construction. For instance, a Mumbai flat with a 1,000 sq. ft built-up area may have a market value of Rs 3 crore, but taking the cost of construction of, say, Rs 4,000 per sq. ft, the sum insured will be Rs 40 lakh.

“There is a provision whereby the sum insured is automatically increased by 10 per cent in long-term policies on completion of every 12 months from the date of commencement of the cover,” says Nikhil Apte, chief product officer, Royal Sundaram General Insurance. “This takes care of the rise in construction costs due to inflation.”