What should be the bare minimum home insurance to go for to protect the building component?
The Home Insurance coverage cost is decided based on all or some of the following parameters.
The Home Insurance coverage will depend on if you are insuring the building only or the contents only or both. If you select building only, the value of the home structure will be taken into consideration. For contents, the value of personal belongings and jewellery will be considered. For a plan that encompasses a comprehensive cover for both contents and building, the value of both building and contents will be added.
Value of the Building
The value of the building is the reconstruction cost and not the market value of the property. An optimum coverage should adequately compensate for the rebuilding cost. To find the building value, the built-up area of property and the construction rate per square feet will be multiplied.
For example, if the built-up area of your home is 1200 square feet and the construction cost is Rs.1,500 per sq.ft, the sum insured for the building structure will be Rs. 18,00,000.
Value of Contents and Jewellery
While calculating the Home Insurance coverage costs, you must also specify the value of contents and jewellery. The insurance must be able to sufficiently cover the costs of replacement.
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