How To Calculate Home Insurance?

May 15, 2011     Posted under: Home Loan

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Home insurance covers the structure as well as the contents of the property. The calamities covered range from fire, lightning, aircraft damage, earthquake or floods, which cause damage to the structure and to the contents of the home. Burglary or theft of the contents only is also covered. In case the home is destroyed by fire or an earthquake or any other calamity, the insurance company will pay you the cost of constructing the house again.

What is not covered in the policy?

The home insurance policy will not cover any damage arising out of war or war-like situation, not even a military uprising or rebellion. It will also not cover loss to the property directly or indirectly caused by radiation or contamination by radioactivity from any nuclear fuel or from nuclear waste.

How To calculate Home insurance

Total Area for your home (A)

Cost of construction per square feet (B)

Sum Insured for Structure (A) * (B) = (X)

Sum Insured for contents

Furniture (A)

Television (B)

Jewellery (C)

Refrigerator (D)

Other Electronics (E)

Total Value of Contents (A) + (B) + (C ) + (D) + (E) = (Y)


Premium for structure (X) * multiplier (depends on various insurers)

Premium for content (Y) * multiplier (depends on various insurers)

Sum of these is the premium with applicable service tax

NitiN Kumar Jain

Nitin works in an IT MNC professionally but blogs and owns NKJ Live. He is also the co-owner of a professional start-up ARGHAM BYTES

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