What to Look for In Home Insurance Policy?

It is your home where you feel the safest. As such, it is up to you to ensure that your home is always protected. After all, it is one of the most valuable assets you own. The ideal way to safeguard your home and ensure your financial security is to invest in a home insurance policy. Such a policy serves as your financial safety net in case something unexpected happens to your house. However, with so many home insurance companies, it can get confusing to find one that fulfills your specific requirements. It is no wonder that many investors are often left puzzled about what to look for in homeowners’ insurance policy? Here’s a home insurance buying guide that will answer your various home insurance-specific questions.

What to look for when buying home insurance?

Whether you're buying a new house or simply renewing your existing home insurance policy, here are a few home insurance tips and factors to consider when a zeroing in on a home insurance provider.

1. Select an Insurer offering all-round coverage
   Your house is a huge financial asset in itself. It is also a place in which you would be storing your other assets accumulated throughout your lifetime be it art, jewellery, and other expensive consumer items like furniture, appliances and more. Losing your house or any of your assets owing to a natural calamity or a human-made disaster can mean unspeakable financial losses. As such, it is recommended that you select an insurance provider offering all-round coverage, including a rider that covers your assets within the house. So, our first tip for homeowners insurance is to select an all-encompassing policy; one that protects your house and your assets against floods, cyclones, earthquakes, tsunamis, tornadoes, and other such natural calamities. The policy should also protect your against an array of human-made disasters including burglaries, thefts, vandalism, arson, and damages caused due to activities like riots, strikes, terroristic activities and more. An all-round policy will provide you with the necessary financial cushion in case something terrible happens to your house.

2. Select an insurer who covers the costs associated structural damages, assets replacement, and temporary accommodation
   Aside for the basics of what to look for in house insurance, you should also look for an insurer covering expenses for adequate accommodation, until your house is repaired. So, the insurance policy should cover you against both the structure of the property and provide you with financial reimbursement until the reparation work is done. For instance, if your property is destroyed in an earthquake, it can take a long time for it to be repaired. A good home insurance plan covers the costs associated with repairing the house, replacing the damaged assets (furniture and appliances, for instance), and factors in the cost associated with you having to live in a temporary, rented facility, until your house is rebuilt. It should cover the financial costs of repairing or replacing your personal possessions.

3. Select a company with a good claim settlement ratio
   Another one of the many home insurance tips is to check the insurance provider’s claim settlement ratio before buying your policy. A company’s claim settlement ratio gives you an insight into the average number of claims settled by the company each year, and the time taken to settle a claim. Typically, you will find these details on the insurance provider’s website. You can also check various consumer reports that periodically publish the service ratings for large insurers. A good home insurance company is one with a high claim settlement ratio over a short turn-around-time (TAT).

4. Select a company with a good reputation for customer service
   The last thing you want when your property is compromised is to run pillar to post to gather documents or get in touch with a company representative. You want to ensure you can inform your insurance provider instantly and get the claim process to begin at the earliest. For this, you will need the necessary guidance or assistance in beginning the claim process. This is why it is essential that you ensure that your property insurance provider has a good reputation for customer services, leading to a smooth and hassle-free claim settlement process. Read customer reviews to get an insight into the customer service offered by the insurer. A good insurance provider may also assign a dedicated relationship manager as your point person while filing claims.

5. Select a financially strong company
   An obvious tip for homeowners insurance is to ensure the insurer is financially strong and has the capacity to pay for the costs associated with your home insurance claim. You can assess a company’s financial strength through the publicly disclosed figures such as the number of customers it has, the claims settled by the company, and the current assets and balances. A good way to assess a company’s financial strength is to assess the ratings assigned to its insurance products by the IRDAI. When buying home insurance, make sure you go for a reputed insurance provider and good home insurance plan.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.