Your home is not just an asset, it is home to your dreams, memories and most precious possessions. It is imperative to keep it protected from unforeseen events like fire, theft, natural calamities or accidents. A strong home insurance policy is the financial shield that protects you from these uncertainties. But just buying a policy is not enough; choosing the right coverage, best benefits and a reliable company is the key to success.
Step 1: The Basics: Assessing Your Needs
First of all, do not buy a policy without thinking. Understanding the specific needs of your home is the first and most important step.
- Reconstruction Cost vs Market Value: A common misconception is that the insurance amount should be equal to the market value of your home. This is not true. You need to assess the cost of rebuilding your home, which includes the cost of materials and labour. This cost is separate from the value of the land and is often lower than the market value. Getting a professional valuation done can help you with this.
- Inventory: Add up the value of everything inside your home—furniture, electronics, jewelry, clothes, utensils, and even everyday items. A good way is to video record or photograph every room in your home, and keep bills and receipts safe. This helps a lot in the claim process.
- Risk analysis: Understand your geographical risk. Is your area prone to floods or earthquakes? Is there a high incidence of theft? Based on these risks, you will need additional features.
Step 2: Understanding the types of coverage
Home insurance is mainly divided into two parts:
- Building/structure insurance: It covers the physical structure of your home—walls, ceiling, floor, fixtures, plumbing and electrical wiring. It provides protection against damage caused by events such as fire, explosion, lightning, storm, riot, etc.
- Contents insurance: It covers the movable assets inside your home—furniture, electronics, jewellery, clothing, etc. It provides protection against theft, fire, flood (if covered) and other specified risks.
Step 3: Select the best company and plan
This is the most important step. Don’t choose based on the price of the premium only. Pay attention to these points:
1. Claim Settlement Ratio (CSR – The Golden Metric):
This is the most important indicator of the reliability of any insurance company. CSR tells how many percent of the total claims received by the company in the previous year were paid by the company. For example, 95% CSR means that the company accepted and paid 95 out of 100 claims. Prefer a company with a CSR of more than 90%. This data is publicly available in the annual report of the Insurance Regulatory and Development Authority of India (IRDAI).
2. Comprehensive coverage and additional benefits:
A good policy should include the following benefits or make them available as additional benefits:
- Natural disasters: Disasters such as floods, earthquakes, tsunamis are often not covered in the standard policy. These may have to be covered by paying an additional premium.
- Personal accident cover: Covers in case of permanent disability or death of the policyholder and family members.
- Alternate accommodation: Covers expenses in case you have to live in a rented house due to damage to the house.
- Electronic devices: Special cover for laptops, cameras, mobile phones, etc., as their limits may be low in the general contents cover.
3. Premium and affordability:
Don’t buy a policy with low coverage just for the sake of cheaper premiums. Compare premiums, coverage and exclusions of different companies using online insurance aggregators (like Policybazaar, Coverfox, BankBazaar). Sometimes you may get good discounts on online shopping.
4. Customer service and reviews:
Check the reputation of the company. Read online reviews, especially about claim settlement experiences. Check the level of responsiveness and support by calling the company’s customer care centre and asking your queries.
5. Network and Reach:
Ensure that the company has a strong network in your city/area, especially of surveyors and claim officers, so that quick assistance can be provided in case of an emergency.
Step 4: Understanding the claim process
A good company has a simple and transparent claim process. Understand it before buying a policy.
- Filing a claim: Report the incident to the insurance company immediately (usually within 24-48 hours). File a claim via the company’s helpline, website, or mobile app.
- Documents required: Claim form, insurance policy, FIR of the incident (in case of theft/arson), detailed photos and videos of the damage, repair estimate, and purchase receipts (for jewellery, electronics, etc.).
- Survey: A surveyor from the company will come to assess the damage. Give him all the information and evidence.
- Claim settlement: After all the investigations are completed, the company will pay the claim amount. A company with high CSR makes the process fast and seamless.
Top Indian companies (where you can start)
- HDFC ERGO: High CSR, wide network and coverage options.
- ICICI Lombard: Good customer service and quick claim process.
- Bajaj Allianz: Innovative plans and additional features for home insurance.
- Tata AIG: Strong financial support and adherence to international standards.
- The New India Assurance: Government company, widest network, especially in remote areas.
Final Tip: Make an informed decision
- Read the policy document carefully: Especially understand the exclusions (what is not covered) and waiting period.
- Make the right declaration: Do not hide any information while buying the policy, else the claim may get rejected.
- Renew on time: Renew before the policy expiry date to avoid any gap in coverage.
Conclusion
Getting the best home insurance is a well-thought-out strategic decision, not an impulse buy. Analyse your needs, compare companies, and above all, prioritise the claim settlement ratio. A little extra time and research can get you a policy that will protect your home in times of crisis.