Parameters to Decide on Home Insurance Coverage
The following parameters are looked at when deciding the home insurance coverage.
Type of plan
The home insurance plan that you take from IFFCO Tokio will depend on whether you want to ensure only the building or the content in the house as well. The home structure will be factored if you select the building only. If you opt to insure the content as well, then the personal belongings and other expensive content will be considered for coverage. You could also opt for a comprehensive cover that covers both.
The value of the property
The value of the building is calculated as per the cost of reconstruction. This will be lower in most cases when you compare it with the market value of the property. You need optimum coverage to take care of the cost of rebuilding the house. This is calculated based on the built-up area of the property and the construction rate which is taken for per square feet.
Value of the content at home
You need to specify the value of the content and jewelry that you have at home before you buy the insurance policy. The insurance coverage should be able to cover the costs for the same and should provide adequate coverage.
How is the Sum Insured Calculated?
Before you buy a home insurance plan, it is important to understand what sum insured you need, so that you buy a plan best suited for you. The insurance company will be paying the full replacement cost, subject to the maximum of the sum insured. This will only pay for the construction cost and not the cost of the land. The structure will be according to the reinstatement value and the content of the house will be insured under the market value approach.
This is not a thumb rule and different insurance providers have different methods to value the contents of the house.