Jun 21, 2023Homes and People

Home Insurance Glossary: Key Terms to Know

by Godrej Properties Limited

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A Comprehensive Home Insurance Glossary for Indian Homeowners

Home insurance is crucial to protecting your property from unexpected damages or losses. However, understanding the jargon associated with home insurance can overwhelm many homeowners. To help you navigate through the complexities of home insurance, here are some key terms in this article you should know.

Critical Terms For Home Insurance You Need To Know In India

1. Premium Amount 

 The amount you pay to the insurance company for coverage is known as the premium. It is usually paid annually or in instalments and is determined based on the factors such as the value of your property, location, and coverage options.

2. Coverage Included

 It refers to the protection offered by the insurance policy. It includes various aspects, such as structure, content, and liability coverage.

3. Deductible Amount

 A deductible is a sum you agree to give out of yourself before the insurance coverage kicks in. For instance, if you have a deductible of INR 5,000 and file a claim for INR 20,000, you will receive a reimbursement of INR 15,000 from the insurance company.

4. Perils Or Risks

 Perils are specific risks or events that could cause damage to your property. Common perils covered by home insurance in India include fire, lightning, explosions, earthquakes, floods, and theft. It's essential to review the policy to understand which perils are covered. 

5. Sum Insured

The sum insured is the maximum amount the insurance company will pay in case of a claim. Therefore, it is essential to accurately assess the value of your property and belongings to ensure adequate coverage.

6. Exclusions And Endorsements

 Exclusions such as pre-existing damages, wear and tear, intentional acts, or certain natural disasters are not included in the policy. 

An endorsement is a modification or addition to the standard insurance policy. It allows you to customise your coverage based on specific needs.

7. Claim Settlement Ratio

 The claim settlement ratio is the percent of claims settled by the insurance company against the total claims received. A higher ratio indicates a higher likelihood of your claim being paid promptly.

8. No Claim Bonus (NCB)

 NCB is a reward insurance companies give policyholders for not filing any claims during a policy year. It typically results in a discount on the premium during policy renewal.

To Conclude

Understanding these key terms will empower you to make informed decisions when purchasing or renewing your home insurance policy in India. Remember to carefully read the policy documents and consult with insurance professionals to ensure you have adequate coverage tailored to your specific needs.
 

Frequently Asked Questions

1. How can I make informed decisions about home insurance?

 Ans: By understanding these key terms, reading policy documents carefully, and consulting with insurance professionals, you can make informed decisions about your home insurance coverage in India.

2. What is the premium for home insurance? 

Ans: The premium is the amount you pay to the insurance company for coverage.

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