Other than your life and medical insurance, there are two other insurances that you must have as a homeowner—home insurance and home loan insurance (if applicable). Home insurance safeguards your house against any damage, loss, or theft, while home loan insurance covers you and your family if you are unable to pay your home loan EMI in case of a loss of income or your untimely death.
Home insurance is concerned with the ‘actual physical’ structure of your house. Amit Goenka, MD and CEO at Nisus Finance shares, “Home insurance is an insurance policy that covers the structure of your house from damage that may be caused by unforeseen events such as fire, theft, storms, cyclones, or earthquakes. Home insurance also secures your home if it gets damaged due to terrorism activities or riots.” Kaushal Agarwal, chairman, The Guardians Real Estate Advisory further shares, “Home insurance can also cover expenses related to repairs or replacement of damaged or lost property, including personal belongings, as well as temporary accommodation expenses if the home is uninhabitable.”
As the name suggests, home loan insurance is an insurance plan under which the insurer covers the outstanding home loan amount with the lender. “It is mostly a term insurance policy that pays off the balance loan amount in case of unforeseen events such as job loss, accidents, or death that may prevent the borrower or his/her survivors from paying further EMIs,” mentions Goenka. Home loan insurance is also helpful when it comes to mortgages. Agarwal adds that home loan insurance can be required by lenders as a condition of the mortgage, particularly for borrowers with a high loan-to-value ratio. Explaining the benefits, Agarwal adds, “Home loan insurance can also provide peace of mind for borrowers, knowing that their loved ones will not be burdened with mortgage payments in the event of their death or disability.”
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