India is blessed with unique geo-climatic conditions. But this also makes regions of the country vulnerable to varied natural and man-made disasters, like forest fires, cyclones, floods, and landslides. Studies have found that almost 58.6% of the landmass of India is prone to earthquakes, while 12% is prone to floods. This increases the chances of catastrophic damage to buildings and homes. Other risks are from theft, vandalism, and explosion. This is when a combination of home insurance and hazard insurance can offer adequate coverage. Hazard insurance is a part of home insurance that protects the building structure. Read on to know more about the difference between hazard and home insurance to make an informed choice.
What Does Hazard Insurance Cover?
Hazard insurance is typically included in a comprehensive home insurance policy. For the purpose of insurance, hazard means fire, earthquake, severe storms, cyclones, burglary, sabotage, smoke, vandalism, short circuit and water damage. It can include damage caused to the structure of a house due to a motor accident. Hazard insurance does not cover third-party damage caused inside the house premises.
Having hazard insurance pays off when there are broken pipes, blasts due to gas leakage, plumbing or heating risks, and damage due to civil commotion. This policy is extremely helpful to preserve the resale value of the property or simply maintain the functionality of the same.
What Does Home Insurance Cover?
A home insurance policy covers loss and damage of home contents like furniture, electrical appliances, electronic appliances, kitchen items, jewellery, garments, valuable documents, and general fixtures. It’s possible to get an insurance policy that offers an all-rounded financial safety net for yourself and any legal liabilities that may arise.
In short, home insurance extends much beyond the structure of the house. It may also cover sections that are not attached to the structure of the home, like your driveway, mailbox, backyard, lawn, compound, shed, garage, and fences.
Home insurance also covers the costs of alternate accommodation in case you need to shift out of your home for extensive repair or rebuilding. You can rely on the insurance provider to pay for your rent, food, travel, and other living expenses for a pre-specified period.
Lastly, home insurance is extremely helpful in case of third-party disputes. There could be physical injuries or vehicle damage to a third person inside your home premises. If the concerned neighbour or acquaintance sues you, the insurer bears the cost of legal charges. The expenses of any minor medical treatment that you may have to extend to them are also covered under comprehensive home insurance.
Understanding the difference between hazard and home insurance can help you choose the policy that is best suited to your needs and budget. It’s also important to know the exclusions, or what that policy does not cover. For instance, you may not be covered for damage due to acts of war, normal wear and tear, like worn-out flooring, and structural issues due to termite or other infestation.
