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Types of damages covered under home insurance

  • Highlights

  • Covers damage to the home and theft of valuables

  • Covers against man-made and natural disasters

  • Provides temporary living expenses

  • Protects against electrical and mechanical damage

A home insurance policy provides cover against damages caused to your home and its internal contents. Home Insurance can be broadly divided into two types – fire insurance policy (FIP) and comprehensive insurance policy (CIP). FIP provides financial cover against loss or damage arising from fire, storm, flood, etc. CIP can further be divided into two types, providing cover against damage to the building structure and damage caused to the contents of the home.

While buying an insurance plan has become easier, choosing the best option available has become all the more confusing. It is recommended to closely study the inclusions and exclusions of each plan. In general, home insurance does not cover under construction property, natural wear and tear, and damage due to negligence. However, the specific damages covered can differ from insurer to insurer. Read along to discover the damages covered by home insurance -

Fire insurance policy(FIP):

This policy provides cover against fire and allied perils including aircraft damage, fire, lightning, bursting and overflowing water tanks, explosion, riot, strike, storm, cyclone, flood, landslide, rock-slide, and missile testing operations.

Earthquake cover:

The policy offers coverage against loss or damage to any of the insured property. However, many policies do not cover flood or overflow of the sea, rivers and lakes due to earthquake. Various companies cover losses arising out of earthquakes.

Additional Read: Which is Best Home Insurance?

Burglary and theft cover:

Burglary cover secures your home against loss of precious metal, articles made of precious metal. Including jewellery, watches precious stones or stamps, rare books, medals, designs or any other types of collectibles. ATM cards, bonds, deeds, bill of exchange, bank notes, credit cards, treasury notes, money, securities or any other type of negotiable instrument.

Structural cover:

Structural damage can be caused due to man-made or natural disasters. Most structural damage is due to foundation issues, weather-related damage, like a tornado or hurricane, or hidden structural damage, like that caused by termites. A handful of companies cover structural along with anything attached to the structure like a garage, porch or a deck also enjoy the cover.

Electrical and mechanical damage:

Home insurance also provides cover against losses arising out of electrical and mechanical damages to equipment like radio, television, computers, video and audio equipment. Provided these equipment are present in your home when the damage occurred.

Additional Read: Consider These Things Before Buying Home Insurance

Temporary living expenses:

Damages and loss to your dwelling space could force you to look for temporary resettlement or alternate accommodation. Certain home insurance providers cover rents and expenses arising out of alternate settlement, arising out of policy inclusions like fire, flood, explosion, etc. The maximum amount covered would depend on the policy clauses.

As mentioned above, the inclusions and exclusions differ from insure to insurer. The aforementioned list is only an indication of the commonly covered damages. Thus, it is important that you conduct your own research before availing a home insurance policy.

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