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FinanceWhy Home Insurance is a Must

Why Home Insurance is a Must

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Your home is probably one of your most expensive purchases. With property rates increasing, the value of a home is appreciating. However, due to certain unforeseen events, the chances of damage to your home cannot be ruled out. If any such event occurs, you may become financially burdened to recover the losses and rebuild your home once again.

In order to protect your home from any kind of damages, you may avail of a home insurance policy. This policy acts as a safety net in times of disasters and offers protection against damages to the house or its possessions. Such an insurance plan also provides liability coverage against accidents that take place in the house or on the insured property.

Following are four advantages of availing of an insurance plan for your house.

  1. Coverage against natural and man-made disasters

In cases of damages caused by human beings such as thefts, vandalism or fire, you may suffer a loss or damage of your possessions. There may also be implications due to a riot, strike, or a terrorist attack. Besides, a natural calamity such as an earthquake or a flood could have a serious impact on your home. In order to obtain protection against such man-made and natural disasters, you may avail of a house insurance policy. Doing so ensures that you are financially equipped to rebuild your house.

  1. Coverage for the contents of your home

You may have purchased expensive gadgets and other valuables for your home. In the case of an explosion, theft, fire, or any such disaster these possessions may be lost or partially damaged. A house insurance policy, however, provides coverage for the possessions in your home. This includes valuables like electronics, jewelry, watches, furniture, and other personal belongings.

  1. Coverage of temporary living expenses

There may be times your house is severely damaged and requires extensive repair. During such times, you may rent an apartment on a temporary basis till your house is ready. When you avail of an insurance policy, the insurance provider offers to pay the expenses incurred for paying the rent. However, the limit for this varies from policy to policy.

  1. Preferred while obtaining home loans

Banks and Non-Banking Financial Companies (NBFCs) prefer lending home loans to those individuals who have their home insured. They may offer lower interest rates and discounts as well. Moreover, some financial institutions include house insurance as one of the basic eligibility criteria for obtaining a loan.

Keeping the aforementioned benefits in mind, you may opt for a house insurance policy and be covered by just paying a small premium. The premium is generally calculated based on the property area, the location of your home, and the rate of construction, besides many other factors. While providing insurance for the contents in your home, insurers generally calculate the current value of the items based on the market value after reducing the amount of depreciation.

Property insurance acts as a safeguard in case of mishaps. You may rest assured that your house and its possessions will be replaced in case of any damage or theft. You may, therefore, avail of a house insurance policy and reap the benefits such plans have to offer.

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