Household Insurance – What is it, and is it for you?

Scarcely a day goes by without reading about a burglary, fire, a building collapse, flooding or similar things happening that damage homes and cause immense monetary loss. Your housing society may have a watchman, your home may have a fire extinguisher, you could take a number of precautions, but if destiny has it out for you, none of that will help.

That’s where householders insurance comes in. Though not as popular as Life or Health or Auto insurance, it is nonetheless offered by all the major General Insurance companies in India.

A typical householder’s policy covers your house property from natural mishaps, robbery and fire. Basically, in exchange for paying an insurance premium, the insurance company commits to pay you upto the insured amount in case any of the calamities mentioned above do happen.

Going in a little further detail, let us look at what specifically is covered by a Householders Policy.

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In a comprehensive Householders Policy, the coverage is divided as follows:

1. Fire

a) Coverage for building

b) Covers contents of the dwelling belonging to the proposer and his/her family members permanently residing with him/her.

Allied Perils:

a) Fire, Lightening, Explosion of gas in domestic appliances

b) Bursting and overflowing of water tanks, apparatus or pipes.

c) Damage caused by Aircraft

d) Riot, Strike, Malicious or Terrorist Act

e) Earthquake, Fire and/or Shock, subsidence and Landslide (including Rockslide) damage

f) Flood, Inundation, Storm, Tempest, Typhoon, Hurricane, Tomado or Cyclone.

g) Impact damage

2. Burglary

This section provides coverage for the contents of your house against burglary, house-breaking and similar incidents.

3. Risks for Jewellery and Valuables

This covers loss due to accident or misfortune to your valuables while kept, worn or transported anywhere in India

4. Breakdown of domestic appliances

This part of the policy protects against malfunctioning or breakdown of appliances like TV, refrigerator, washing machine etc. This is separate from theft of such items and will be subject to exclusions for mishandling of the same.

Different insurers will have more or fewer items of coverage than this, however the sections mentioned above are commonly present in the offering of all major insurers in India. Moreover, you do not necessarily need to opt for the entire comprehensive package, as you can typically pick and choose certain sections from it that might be useful to you.

What parts of this might be relevant to you depend on your specific requirements. For those of you living in well-protected housing societies with strong security processes in place, the burglary insurance might not be as useful as it would for someone living in a standalone house or even a single building is a less safe area.

Similarly if you are a tenant and not a home-owner, insuring the contents of the house is all you need, not the structure itself. If you commonly keep your jewellery in a Bank safe deposit and do not travel with it, the nature of insurance you need for that would be different than a typical comprehensive coverage.

Speaking from personal experience, if your house is near the coast, and salt-bearing winds are a part of your life, your electronic appliances definitely need insurance. You might also want to look at flood coverage if you are in an area with heavy rainfall, on similar lines.

In the end, Householders Insurance is not an absolute ‘must’ unlike Life and Medical coverage. This is because it can be expensive, of course, but also because for those who live in rent, it might not make a lot of sense. Nonetheless, for those who own their houses, it is worth exploring.

As with all insurance policies, don’t be afraid to ask the agent questions. It is what he is paid for. Find out all you can about what is covered, what is not covered, how much coverage you have in case the unforeseen event occurs and so on. Finally, there is no price on peace of mind, and having that policy in place will ensure you feel safe within and outside the four walls of your home.


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