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Why buy home insurance?
- Owners: To protect both your house and personal property.
- Tenants: To protect your personal property.
- Everyone: Protection against liability for accidents that injure other people or damage their property.
What is the procedure for assessing the value of my home structure and its contents?
The value of your home structure is assessed as per the area of your home multiplied by the rate of construction per. sq. feet, as on the date of taking the policy. For example, if your home is 1000 sq. feet and the construction rate per sq. feet is Rs. 800/-, then the sum insured for your home’s building structure is
Rs. 8,00,000.
On the other hand, the contents are assessed on the market value of the items. This means that if there were a loss, the claim would be paid on the value of purchasing a similar new item, less depreciation for the usage.
What are the exceptions against cover within the purview of the Householder's Insurance Policy?
Under Section 1 (B) the Householder's Insurance policy, any loss or damage suffered to the following is treated as an exception and cannot be claimed.
- Consumable articles
- Money/ Securities/ Stamps/ Stamp collection]
- Bullion and Livestock
- Motor vehicles and Pedal cycle
- Deeds/ Bonds/ Bills of exchange/ promissory notes/ Shares
- Books/ Manuscripts
- Loose precious stones, Jewellery and valuables
On what basis are the structure and contents insured?
The structure of your home is insured as per the re-instatement value and the contents are insured as per the market value.
How much home insurance do I need?
- Asset Protection: More coverage generally means you will have less to pay out of your own pocket if disaster strikes. You must determine the amount you can financially afford to lose. Depending upon your determination, more insurance may be the answer. You need enough liability coverage to protect yourself from lawsuits resulting from your possible negligence.
- Lender Requirements: Your lender may require you to cover the house for at least the amount of the mortgage. You are not required to purchase insurance from the insurer recommended by your lender.
- Policy Requirements: Insurers may impose some conditions for replacement cost protection, including insurance of the property to value.
What affects home insurance prices?
- Type of Construction: Frame houses usually cost more to insure than brick.
- Age of House: New homes may qualify for discounts. Some insurance companies offer limited coverage or may not insure older homes.
- Local Fire Protection: The number of fire hydrants and fire departments and the availability of water are some factors that determine your area's fire protection class. If you reside in an area without fire protection, you will pay more for fire insurance.
What deductible should I choose?
The deductible applies only to the coverages on your house and personal property. It is the amount you have to pay out of your pocket on each claim. You can collect on your insurance policy once the deductible amount is exceeded. A policy with a $100 deductible will cost more than one with a $250 deductible. Higher deductibles also will result generally in fewer claims, at a time when insurers are nonrenewing if the number of claims is considered "excessive."
What basic coverages are available?
The most common basic coverages are: property damage, additional living expenses, personal liability and medical payments.
What does personal property insurance coverage include?
In general, the contents of your home and other personal belongings owned by you or family members who live with you are covered under the policy equal to 50 percent of the value carried on your dwelling. However, high-valued personal property such as jewelry and cameras should be listed on the policy so that you are adequately protected.
What is personal liability insurance coverage?
Personal liability coverage protects you and all family members who live with you against a claim or lawsuit resulting from (non-auto and non-business) bodily injury or property damage to others and for which you become legally obligated to pay. Defense costs are included, but the insurance company has no duty to defend you after the limit of liability on the policy has been exhausted.
What is replacement cost?
Replacement cost is the amount necessary to replace or rebuild your home or repair damages with materials of similar kind and quality without deducting for depreciation.
How can I get a lower premium?
Strongly consider a higher deductible so you can cut your premium. In the current insurance market, don't tempt yourself with the possibility of a small claim, considering that many insurers now refuse to renew polices with a claim history and refuse to accept new customers with prior claims. View your homeowners insurance as catastrophic coverage only, and set aside your premium savings to cover minor repairs.
I had a loss, and my roof needs repair. The company is only willing to pay for repairing part of the roof even though the contractor has said that I need to replace the entire roof.
If the shingles that are currently on your roof are no longer manufactured, the company is responsible for replacing your entire roof. But if your shingles are manufactured and do not match the existing shingles due to weathering, the company is only responsible for replacing the damaged shingles, not the whole roof.
I have replacement coverage for contents under a homeowner's policy. Some of my property has been stolen. Can the company settle for an amount less than replacement?
The company will usually pay the actual cash value, which is the replacement cost minus depreciation, for the loss or damage - until the property is replaced. Once the insured replaces the damaged property and provides receipts to the company, the company should reimburse the difference.
I have had homeowner's insurance with the same company for years. I had two claims last year, and now the company will not renew my policy. Can they do this?
Yes. Each company has its own underwriting guidelines, which indicate what risks they will assume. State law permits an insurer to nonrenew a homeowner´s policy on the policy anniversary date as long as they give the insured 30 days advance written notice and the specific reasons for the nonrenewal.
Does my homeowner insurance policy cover flood damage?
Generally, homeowner insurance policies do not offer protection against flood losses. You should check your policy under Section I - Exclusions. It would probably be listed under "water damage".
Flood insurance is available through the federal government's National Flood Insurance Program. It may be purchased through any licensed property/casualty insurance agent or through many private insurance companies that are now writing flood insurance under arrangements with the Federal Insurance Administrator.
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