Household Insurance

Household Insurance- Overview

Household insurance can also be referred to as home insurance, homeowner’s insurance, and hazard insurance. In the real estate industry terminology home insurance is also referred to as HOI. This insurance is used to provide coverage to private homes.

The household insurance policies cover the protection features of various forms of personal insurance as may be enumerated below:

Losses happening in a home
Loss of personal articles owned by the homeowner
Losses happening to the contents of a home
Liability insurance for accidents in the home
Loss of the use of a home such as extra costs for living
Liability insurance for accidents in the policy territory for which the homeowner may be responsible

The basic requirement of these policies is that a minimum of one person among the individuals insured should be staying at the concerned house. The dwelling policies are also similar to these but are normally employed for residences which lack proper qualification due to one reason or the other like any of the following:

Vacancy or non occupancy
Age
Secondary or seasonal residence

Household insurance has also been defined as a multiple line insurance that includes the characteristics of both liability coverage and property insurance. These policies also have an undividable premium, which means that one premium is paid to cover every possible risk.

Expenses involved in Home Insurance

The expenses in home insurance are dependent on the amount that would be necessary to replace the house. The extra riders to be attached to the plan also determine the costs associated with the program.

Ideally the insurance policy should be created in such a way that it reflects the replacement costs and cost index, and inflation factor should be included in the calculations.

The following section provides information on the premiums of some the leading home insurance policies in India:

HDFC ERGO General Insurance Home Insurance
The premium varies between INR 382 and INR 3820 in case of the building segment of the fire and special perils cover. In case of the contents segment the cost ranges between INR 76 and INR 611. As far as burglary and theft cover is concerned the premium ranges between 270 and 2157.

Royal Sundaram General Insurance Home Content Insurance
In case of the Silver plan the premium is INR 1392, and for the Gold plan it is INR 2587. As far as the Platinum plan is concerned the amount comes down to INR 3777.

Homeowner’s insurance coverage details

The homeowner’s insurance policies normally cover damages owing to floods and war – under normal circumstances such coverage includes nuclear explosions. However, these plans do not cover damages due to sources like termites. Interested proposers can also opt for special insurance to cover possibilities of flood.

Nature of hazard insurance

The hazard insurance contracts are primarily term contracts and this means that they are effective only for a stipulated period of time. The premium needs to be paid for each term.

HOI Premiums

The premiums of HOIs are lesser if the insurer feels that the chances of the house suffering from a calamity are lesser. Following are certain situations where the insurer might perceive lower levels of risk and thus take lesser premiums:

If the house has for example sufficient arrangements to fight fire like fire alarms and sprinklers
If the house has a security system
If the house is located near a fire station
If the house owner has put in locks that are approved by the insurer
If the house has proper measures to mitigate wind like hurricane shutters

Perpetual insurance is a form of home insurance and does not have a stipulated term period as such. It is availed in certain areas.

Top Household Insurance Plans in India

Following are the leading household insurance policies on offer in India:

HDFC ERGO General Insurance Home Insurance

Following are the major features of the Home Insurance policy offered by HDFC ERGO General Insurance:

Provides sufficient safety for various possessions and properties
Provides optional cover at low costs in case of burglary – this also includes larceny, and theft
Provides protection for both household contents as well as home structure
Provides a maximum discount of 15 percent in case of security features

Royal Sundaram General Insurance Home Content Insurance

The Home Content Insurance plan of Royal Sundaram General Insurance provides coverage for the following:

Household electronics and appliances – televisions, personal computers, refrigerators, air conditioners, washing machines, and microwave ovens
Jewelry – ones worn by the insured, their family members, and others staying with them
Household contents – clothing, fixtures, furniture, fittings, curtains, carpet and crockery

The policy covers the following forms of danger:

Fire accidents
Riots, malicious damage, and strike
Theft, burglary, chain snatching in case of jewelry
Lightning
Earthquake (fire and shock) and other natural convulsions
Implosion or explosion
Flood inundation, cyclones, and storms
Rockslide or landslide
Electrical and mechanical breakdown - this is inclusive of equipment related problems, and rise and fall in electrical supply

ICICI Lombard Home Insurance

The Home Insurance plan of ICICI Lombard provides a detailed cover and insures both the house structure and its contents. It provides a maximum coverage term of 10 years for the house itself and 5 years for the contents. In case someone wants to insure both then the maximum term period available is 5 years.

The policy primarily covers fire and related perils in addition to theft and burglary. It also provides optional cover for terrorism and extra expenses like rent if the insured has to look for substitute accommodation.

HDFC Bank Home Insurance

The Home Insurance plan of HDFC Bank provides protection of both the house and its contents and requires minimum documentation for the same. If the house has adequate security arrangements it can get a maximum discount of 15 percent on the premiums. It also offers coverage against burglary, larceny, and theft.

FUTURE GENERALI Home Suraksha – Home/House Insurance Plan

The Home Suraksha – Home/House Insurance Planof FUTURE GENERALI offers 8 different sections or levels of protection. They may be enumerated as below:

Section I - Protection of properties against fire and related dangers as well as earthquake

I-A: Buildings
I-D: Loss of rent
I-B: Contents - it does not include valuables
I-E: Terrorism
I-C: Cost of alternative accommodation
I-F: Purchase protection

Section II – Burglary, theft, and housebreaking

Section III – Protection of valuables

III-A: Valuables and jewelry
III-B: Portable computers – all risks are covered with the exception of breakdown

Section IV: Protection of electronic equipment

IV-A: Audio visual equipments – all risks covered
IV-B: Computers – all risks covered

Section V: Protection of household electrical and mechanical equipment – breakdown of household appliances

Section VI: Accidental compensation (personal accident) – death, permanent total disability, and permanent partial disability. Also includes hospital confinement allowance.

Section VII: Protection against liabilities

VII-A: Tenants legal liability
VII-C: Public liability
VII-B: Workmen’s compensation – domestic employees

Section VIII: Enhanced protection covers

VIII-A: Baggage – all risks covered
VIII-D: ATM cash withdrawal – all risks covered
VIII-B: Plate glass – all risks covered
VIII-G: Veterinary expenses – road accidents
VIII-C: Pedal cycle

Last Updated on 10/04/2012