When Riya and Akhilesh Tewary bought their first home in the suburbs of Mumbai in 2010, little did they imagine that an electrical fire would nearly burn down everything in the home they had so lovingly set up. After such a setback they have had to move to their parent’s home in Pune to save up on their cost of living. The Tewarys’ have only one regret. That to save up on one small expense they did not opt for property insurance, even when their bank loan officer had specifically advised them to do so.

Akhilesh and Riya are no different from a bulk of home buyers in the nation. In India, though real estate investments have grown in leaps and bounds, the attitude towards property insurance shows a complete disregard the home buyers have towards the possibilities of calamities natural or man-made. This is unfortunate because the geographic features and climatic conditions of India are such that it is quite vulnerable to natural disasters. Very few Indians understand this risk they are exposing themselves to by ignoring property insurance. But is it really wise to ignore property insurance? Let’s find out!

Here are some pros of property insurance that homeowners should consider

• Peace of mind- The property you are buying is the costliest asset of your life. With a good property insurance you can keep your worries aside in case a calamity strikes.
• A wide coverage-A property insurance will cover things like damage against calamities both natural and man-made such as electric fires. It can also include things like a burglary or breakage in the house. You can also choose to go for other additional covers such as breakdown or damage of gadgets and the theft of valuables such as jewelry.
• Inexpensive and affordable- When you think property insurance you do not need to insure the entire value of the house, just the cost of reconstructing it in case of a mishap. This cost can be as low as Rs. 50 per Rs. 1 lakh. Overall you can be insured for Rs 30-50 lakhs for a premium of less than Rs 3000 in a year!

The cons of property insurance are as follows:

• Does not compensate fully- Under any circumstances, your insurer will not give you full compensation for your losses. The first 5% of the sum that has been assured is not paid by the company providing this insurance.
• Jewelry cover is not adequate- If you have taken jewelry insurance under a standard cover, chances are it is not going to be enough because only up to Rs. 10,000 worth of jewelry is covered under a standard policy. To insure all your jewelry you will have to take a separate policy the cost of which is Rs.10 per Rs. 1000.
• Burglary cover comes with riders- The claim on burglary will become invalid if your household help is involved in such a robbery or house remains unoccupied for more than a month.

If you have decided on taking up property insurance, do make sure that you ask your insurer to clearly explain the terms and conditions of coverage, and the claim and settlement process. If you are satisfied with all that is on offer, you can go ahead and buy such a policy that fits your budget. It does make an incredible amount of sense to buy property insurance because you do not want your house to be left to chance.