What Is the Coverage To Be Taken To Insure Home?

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How does one decide the amount of coverage one needs to take in order to insure one's home?

A house basically consists of land on which the house is built on, the actual structure of the house and the locality in which the house is built in. If the market value of the house is INR 70 Lakhs the building cost might be only INR 25 Lakhs. The rest of the cost is due to the locality and the market value of the land.

 

The home insurance covers only the cost of the structure and is concerned mainly with the cost of rebuilding the structure.

 

This cost mainly depends on the city in which one resides in. If one is staying in a Metro the costs of construction are relatively higher. The locality might not have too much of a role to play as far as cost of construction is concerned. A house valued at INR 60 Lakhs might have a premium of around INR 1800-2000 for a home insurance policy taken to protect the basic structure and an additional amount of around INR 500 for the protection of the contents of the house up to an amount of INR 10 Lakhs. A premium of INR 1000-1500 is paid as additional coverage for the protection against burglary and damage to doors and windows up to an amount of INR 10 Lakhs.

 

On a payment of additional premium of around INR 5000-6000 per annum one can obtain protection against damage due to terrorism up to an amount of INR 50 Lakhs and the insurance of the contents of the house up to 10 Lakhs, death of a domestic worker due to an accident, Loss of rent due to damage of the house for a period of around 6 months, and the damage caused to the house given for rent for a period of 6 months.

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