Home Insurance Policies for NRIs/PIOs

The quality of real estate properties in India is improving by the day. The real estate developers and builders are using better quality products during the construction of the properties. The returns on these properties are also highly beneficial. Therefore, the number of investors from all over the world has been consistently growing and enjoying the benefits of real estate in India. There are many reasons why there is increasing investment in the real estate industry by NRIs. From time to time the Indian government also motivates the NRIs by declaring various reforms and relaxations.

Although, the Indian government and the legal system provides support to the NRIs investing in India, there are various concerns. These days the NRIs wish to secure their homes by the means of home insurance. Leading financial institutes and insurance companies offer home insurance schemes. Under such schemes, the structure and/or contents of the home are protected as per the preference of the owner. The home insurance policy covers damage done by natural calamities as well as humans. To elaborate, the policy insures the damages done from the following:

• Fire
• Burglary (covers theft of jewellery, silver articles and precious stones)
• Riots
• Terrorism (Optional cover)
• Earthquakes
• Flood
• Aircraft damage
• Hurricane
• Bursting of pipes
• Damage done by road vehicles
• Lightning
• Landslides
• Explosion of hazardous material

Terms and conditions:

The sum insured under the home insurance policy is for structure of the home; however, it is calculated according to the reconstruction value of the home i.e. the cost incurred after the damage and not according to the market value of the home. The reconstruction value is based on the material and labour used in the home. Similarly, while setting the value of the contents of the home, the future depreciation value is calculated.

There are home insurance policies that offer additional options like that of coverage of additional expenses like rent in case the owner has to move in a rented accommodation while the reconstruction is done. To sum up, the sum insured in the policy and the additional benefits ultimately depend on the location, area and condition of the house at the time of insurance.