Should you go for home insurance?

In India insurance is under-penetrated compared to the global average. And those who decide to insure themselves, their priority is life and then the rest follows such as disability and healthcare. These insurance are designed to protect you and your family from financial hardships in the event of death, disability, or illness.

Home insurance is not on the priority list of Indians, however, it is always advisable to take home insurance as it acts as a backup in case things go wrong. It protects you from losing the rupee value of personal property and other assets that you own.

Before going for home insurance you should always keep in mind the ‘replacement cost’. For example, you might have purchased your home five years back, for Rs 50 lakh, but it would cost 1.5 times that amount to rebuild if it was destroyed. Be sure to insure your home and its contents in it based on the amount it would cost you to replace the assets insured. A typical householder policy consists of around 10 sections under which it covers various risks ranging from fire and allied perils, earthquake, floods to loss of baggage. Other than fire and allied section, you will probably have to purchase a special rider to cover from other situations like house-break and public liability. This will lead to an increase in your premiums.

You should understand that the only good purpose of carrying insurance is to protect yourself from the catastrophes you can’t afford. Therefore, a household policy that includes insurance on electrical and electronic gadgets should be avoided as it will unnecessarily increase your premium amount. Hence it is advised to skip adding such add-ons than you can manage.