Things To Remember While Buying A Fire Insurance Policy

When people buy or construct a home for their family, they put in a lot of money and a ton of effort as well. Likewise, setting up a new business is equally difficult and time-taking. In any case, you would never want something bad to happen to your residential or commercial property. Nevertheless, a fire-related mishap can happen even after taking all the necessary precautions. We often come across news related to fire incidents. It is true that not all residential buildings are constructed keeping in mind the safety guidelines.

If the construction of your building does not comply with the guidelines, your property is always vulnerable to fire-related incidents. We all know the kind of damage fire breakout causes. It destroys your property and the items inside the building. Plus, it also causes human casualties. If you cannot make your building more effective and resistant to these risks, you can certainly buy a fire insurance policy. A well-designed fire insurance plan can cover the damage caused to your home or office. It also offers many other benefits. But, before you buy one, you must keep a few things in mind.

Points to consider before buying a fire insurance plan

  • Perils covered

The core purpose of buying a fire insurance policy is to get financially protected in such unwanted situations. If the policy purchased by you does not cover the majority of the standard perils, there is no use of depending on such a plan. So, when you purchase a policy, you must take a look at the list of standard perils covered by the same. Some of them are-

  • Lightning
  • Explosion
  • Implosion
  • Short-circuits
  • Landslide/rockslide
  • Aircraft damage
  • Riots
  • Storm

Besides them, there are many other perils you can include in your fire insurance policy. Some of the exclusions that most of the insurers have in common are like- terrorism, wilful acts, forest fire, gross negligence, and damaged caused by war. Some insurance companies do not cover properties that are still under construction.

  • Add-on covers

If you think that the policy and its features are not enough for you, the option of including add-on covers to the policy is always available to you. The best fire insurance companies allow their customers to incorporate a wide range of add-on covers. It certainly helps you in making the policy more effective and suitable according to your requirements. You may want to include certain items (personal belongings) to the list of items covered. You may also want to increase the amount of sum assured of your policy. So, these things are possible only when the insurance company offers add-on covers.

  • Buy the right coverage

What should be the right coverage amount for your fire insurance policy? Well, it is something that depends on a few factors. First of all, the value of your property should be taken into consideration. The amount of money you have put in the decoration of the interiors is a major factor. Secondly, the number of personal belongings inside your property should also be taken into account. If your home or office is stuffed with too many items, include only those items which do not have high depreciation. The value of like TV, fridge, laptop, etc. depreciates quickly. There is no point in paying an extra amount of premium for such products.

  • Opt for high deductible

In the world of insurance policies, deductible implies the amount of money you have to shell out before your insurance policy kicks in. For example, if you choose INR 3,000 as the deductible value of your policy, then it means every time you make a claim, you will have to pay INR 3,000 first of all. The rest of the claim amount will be paid by the insurer. When you go for a high deductible, it lowers down your policy’s premium.

  • Natural calamities

This is one major point that you must focus on at the time of purchasing a fire insurance policy. Most of the insurers do not count natural calamities like hurricane, landslide, and earthquake in their policy. Fire breakout resulting from any of these natural calamities will not be covered if you end up buying such a policy. No doubt, you would have to regret later. For this reason, when you buy one, make sure the policy documents clearly mention about the inclusion of natural calamities in their list.

So, those are some of the crucial aspects that you should remember at the time of comparing and buying fire insurance policies. The more you compare, the better you will get at choosing the most suitable one. Protecting your property from fire-related hazards is something you should always aim at. Installation of fire safety equipment can make your property less vulnerable to such incidents.  

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