In a past few years, India has seen an alarming rise in the number of natural calamities. The same result in a mammoth loss not only to lives, but the property as well. A house that is built after years of hardships and savings, turns into debris in a matter of seconds after a natural calamity.
The rise in natural calamities
A few years ago, heavy showers pounded Uttarakhand and washed away one of the beautiful villages of the state ‘Bhyundar’. Trekkers used to rest at Bhyundar before continuing their trekking to the valley of flowers. But after heavy showers, the entire village was washed away, leaving the rocks and debris behind.
Scientists warn that India could easily lose millions in coming decades as droughts have now become more severe, the sea level has increased,monsoons have got wetter, and Himalayan glaciers have started melting.
It is a human tendency to seek protection only when only when the problem is imminent. There are many TV reports about houses going under water with all contents floating! Think for a moment, what would have happened after the water receded. All contents, including furniture and fixtures, would have been washed away. Now, who is supposed to pay for such unexpected losses or damages?
Home insurance – a savior during mishaps
Since you can’t control nature’s fury, all you can do is take some serious steps to curtail its impact. Your house is one of your biggest assets, and so it makes complete sense to insure its structure and contents. Home insurance policies are extremely comprehensive in their coverage as they offer an all-year-round protection against various types of risks your house may be exposed to in the future. For instance, it covers your house and contents against fire, burglary, terrorism, and natural disasters like floods, earthquake, etc. The policy also covers you against the financial liability that may arise due to a third-party. While the core objective of a home insurance policy is to give basic protection to a house, the insurance also comes along with riders like key and lock replacement, alternate accommodation, etc.
[su_pullquote align=”right”]Home insurance policies are extremely comprehensive in their coverage as they offer an all-year-round protection against various types of risks.[/su_pullquote]
Moreover, whether you are a tenant or a homeowner, you can customize the policy as per your divergent needs. For instance, you can buy insurance for the structure or content, or both. In addition, it is advised to go for a long-term home insurance policy which offers coverage for 10 or 15 years in one go. The longer the duration of a cover, the cheaper it is likely to be. Also, insuring the house for a longer duration means complete peace of mind for years.
Role of the government
The government’s role here is to work towards increasing home insurance penetration to the lengths and corners of the country — given that the awareness level at present is dismal. The government is already treading on the right path, having passed the Real Estate (Regulation and Development Bill) in March 2016.
[su_pullquote]The Real Estate (Regulation and Development Bill) bill has brought a sign of relief for home buyers, ensuring a complete protection from deceitful builders.[/su_pullquote]
The passage of the bill has brought a sign of relief for home buyers, ensuring a complete protection from deceitful builders. Also, due to the demonetization impact, the prices of property have also come down. In keeping with these progressive steps, it is the right time to complement the good moves by making home insurance compulsory from this financial year. This move will provide a much-awaited financial relief to lakhs of people.
Here are some steps that the government can take to popularize home insurance in India:
- Create awareness campaigns that highlight the importance of insuring home and content
- Like motor insurance, make home insurance policy mandatory in India
- Give tax benefits to home insurance policyholders, including those who purchase it for their rented accommodation
A natural calamity or any other mishap is not something which one can foresee. A repercussion of natural disasters is always more than one can anticipate. Since a house is one of the biggest financial assets, the idea of the tax benefits would push many towards home insurance. Further, the IRDAI has made e-insurance compulsory. Also with digitization, it is likely to become easier for policyholders to buy and maintain policy documents online. This system would work better if the government announces incentives.
By making home insurance compulsory for a minimum sum insured and by giving tax exemptions, the government can lessen the burden on individuals/families, especially those who are staying in calamity prone areas.
It will also ensure that people don’t run from pillar to post after their property has been damaged. We all hope that the government makes home insurance mandatory and gives tax benefits, however, even if it’s not the case, you should buy a comprehensive policy to cover your house. Your ‘home’ is your investment, and you just cannot replace the entire property overnight if any natural calamity occurs. So buy home insurance now and consider tax benefits, if any, as an added benefit!