Home loan Insurance, earthquake Insurance cover
How to claim Home loan Insurance, House Insurance Benefits during natural calamities like earthquake, Flood
Home Loan Insurance: To own a house is a dream of people, especially in India. Most of the people buy a built up house or construct a house with the help of a housing loan. Housing loans have made buying a dream house very easy. Home loan repayment is a challenging task when you have a limited source of income like salary. But, it is near to impossible to reconstruct a house damaged in natural calamities for people with less income. Hence to solve this issue the housing loan lenders have come up with Home loan Insurance scheme, which helps a house owner to claim the building cost of a house lost even in natural calamities like Delhi earthquake in November 2022. This insurance is one of the mandatory loan insurances.
In this article we will see about housing loan insurance and its benefits.
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Table of content
- What is Home Loan Insurance
- Housing loan Insurance Benefits
- How to claim House loan Insurance
- Tips to claim Home loan Insurance
What is Home Loan Insurance?
As the name reflects, the house loan insurance is to protect residential buildings from various damages including natural calamities like earthquake, flood, Sky lightening etc. The insurance covers the estimated cost of building a new house. However, It depends on various parameters set by insurance companies and architects. The insurance companies in India ask for a valuation report of the building which we want to insure.
For Example if the present market value of the building of a house is Rs. 50,00,000/- and basic cost of replacement is Rs. 40,00,000/-, the insurance companies will consider the basic cost of the building to cover under insurance.
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How to avail a housing loan insurance?
Many of the lenders have tied up with insurance companies while some of the banks have their own facility to provide housing loan insurance. General lenders prefer to insure the house building at the initial stage of home loan procedure.
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There are mainly 2 types of housing loan insurance.
- Insurance of building
- Insurance of borrower of home loan
If you opt for housing loan insurance which is to protect the building of a house, you get an amount in case of damage to the building.
If you opt for housing loan insurance which is to cover the life risk of borrower, the nominee in the policy will get the amount after death of covered borrower.
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Generally, Lenders cover full repayment period in single housing loan insurance premium. As per RBI guidelines the housing loan insurance premium can not be added to the housing loan amount.
Home loan Insurance Benefits –
Housing loan Insurance has many benefits including protecting buildings from damages during earthquakes like Delhi earthquake in 2022, Chennai Flood etc., complete home loan repayment in case of miss-happening to borrower, providing funds equivalent to housing loan quantum to the nominee of the borrower. There are other benefits like complete home loan repayment during Terminal Illness, Accidental Death, repayment of EMI of home loan if borrower is jobless up to three to six months, part or full home loan repayment in case of disability.
You also get tax benefits under Section 80C of the Income Tax Act on the home loan insurance premium.
How to claim Housing loan Insurance? Know Home Loan Insurance claim Process
The Home loan insurance claim process is easy if you know the requirement which you need to fulfil while claiming home loan insurance amount. Many times home loan nominees claim for the amount. Here you can see the complete home loan insurance claim process.
First of all inform about the insurance plan to the nominee or beneficiary, do not keep it secret. If you yourself are claiming housing loan insurance, you need to present some documents to the insurance company.
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Housing loan insurance claim documents requirement-
Documents required to claim housing loan insurance in case of damage to property
- Home loan Sanction letter
- Valid Insurance policy document
- Claim form of insurance company
- Valuation of the house when the loan was sanctioned
- Present report of architects
- Documents related to ownership of property
These are the main documents which you need to submit however these are not all the documents as different insurance companies have different requirements of documents.
Documents required to claim home loan insurance in case miss-happening to borrower of the loan –
- Complete filled and signed the claim form
- Valid Insurance policy copy.
- FIR of the accident & in case of a death claim, a Post-mortem report.
- In case of a disability claim, a doctor’s certificate
- Nominee details
- Death certificate
- To repay the loan, details of the housing loan such as outstanding amount, pass sheet of the loan account, KYC, Valuation report, Foreclosure letter etc.
These are the main documents which you need to submit however these are not all the documents as different insurance companies have different requirements of documents.
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Tips of claim Home loan insurance –
Here we have compiled some tips to make the housing loan insurance claim process easy.
- If you are opting for home loan insurance insurance cover to insure life risk you should be honest when purchasing the policy and disclose If you are suffering from any pre-existing ailments honestly. In case of any eventuality, the insurer may reject the claim if you do not declare complete information when you purchased the policy.
- Read policy documents thoroughly and know the hidden facts. If you are in doubt, discuss with the insurance company official directly and understand the requirement and claim.
- Inform your dependent or nominee of the policy about Home loan insurance claim process and beneficiary details.
- Create a folder or file to keep all related documents safe and secure. Try to Keep all the required documents in one place.
- Do not miss the premium and also do not delay the premium amount.
Important Link: https://irda.gov.in
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