Home insurance is a vital financial protection tool that safeguards homeowners against potential risks and losses. However, in India, the response to home insurance has been lukewarm, with a significant portion of homeowners opting not to avail themselves of this coverage.
A benefit for home insurance under the Income Tax Act would give a fillip to the home insurance business like health insurance with Section 80 D. **
According to Section 80 D, an individual or HUF (Hindu undivided family) may deduct the cost of their medical insurance premiums from their total taxable income (in any method other than cash). This tax deduction is available in addition to the Rs 1 lakh deduction allowed by Section 80 C. **
General insurance companies offer home insurance, but they emphasize that these policies only cover specific perils, like terrorism and natural disasters such as earthquakes.* In the event of man-made disasters, such as poor construction quality, such covers would not be in effect.*
Homeowners’ reluctance to categorise and assign values to their items at home is another factor impeding the expansion of the home insurance industry. Due to the minimal commissions associated with the product, insurance agents and distributors also don’t push as hard for these products. The cost of building the property is used to determine the size of the home insurance coverage.*
Regarding property insurance in India, the most comprehensive cover continues to be fire, as that covers all damages due to natural causes and other social risks like riots.
However, insurance companies want to promote home insurance.
Under this insurance, there are six distinct plans and eight add-on covers. Home insurance covers burglary, theft, breakdown of electronic devices, fire and related risks, and all-risk protection for jewellery and other portable equipment.*
The building is protected from loss from earthquake, fire, and storm, while the contents of the home can be covered homeowner insurance policy.*
While home insurance is a crucial component of financial planning and risk management, it has received a lukewarm response in India for several reasons.
Limited awareness, misconceptions about coverage, cultural priorities on physical security, and affordability concerns are key factors contributing to this phenomenon in home insurance.
It’s crucial to conduct awareness campaigns, educate homeowners on home insurance benefits and affordability, and make policies more accessible.
By addressing these challenges and promoting the importance of home insurance, individuals can protect their most valuable asset and ensure financial security for themselves and their families. ^
A home insurance calculator is a convenient tool you can utilise online to check the coverage required based on your needs.
^ Claims are subject to terms and conditions set forth under home insurance policy .
*Standard T&C Apply
** Tax benefits are subject to change in prevalent tax laws.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.