Natural Calamities leading to growing need for home insurance

People choose to buy best of homes with elegant interiors for them but they are often indifferent in securing them. A This become evident as home insurance segment contributes mere one percent of general insurance overall business. People give very little priority to home insurance despite its low premiums.

Home insurance policies cover home and assets from fire and related dangers, burglary, breakdown of domestic appliances, electronic equipments and baggage.

Main reason that can be attributed to the people s indifference towards home insurance is its lengthy process of listing out household items and valuing them. Hence, there is need for simple and easy-to-understand home insurance policies to increase its penetration.

Increase in the rate of occurrence of natural catastrophes such as floods, earthquakes and tsunami has resulted in the growing need to protect homes. Hence, home insurance is picking up in areas prone to natural calamities and among High Networth Individuals where there is potential for greater loss.

And with growing number of homes in middle-income and high-end segment home insurance is gaining awareness across the country.

Increasing incidents of burglary, better awareness and higher disposable income are also among other reasons contributing to the growth of home insurance.

Housing loans have contributed to the growth of home insurance only on bank’s insistence while there are very few takers for it on stand alone basis.

As home insurance segment is still at nascent stage hence, to tap its untapped potential now insurers have started to focus on it. During 2011 Bharti Axa General has shown 100% growth in home insurance segment while ICICI Lombard and Bajaj Allianz General have witnessed 25% and 20% growth respectively.

Much of this growth is coming from metro cities. Currently though home insurance segment is showing growth in metros and Class-A cities but going forward it is expected to pick up in Class-B and Class-C cities as well.

Housing finance companies are playing an important role in evolving home insurance companies in India. Finance companies have made home insurance mandatory for home loans and this has lead to 25% growth in home insurance segment in last fiscal.

During last fiscal home insurance premium has touched Rs 150 crore mark showing the growth of 25% over last fiscal.

Insurance companies are focusing on different distribution channels to boost the growth of home insurance segment. Some companies are focusing on intermediaries as number of intermediaries focusing specifically on this segment has increased because commission is fairly attractive. Companies are also planning to cross-sell home insurance products to their existing motor and health insurance customers. Companies are also planning to focus on online home insurance policies as online buying is not only easy but it also gives transparent view to the customer on policy coverage, exclusion, premium and claim process.

Tags: Home insurance, house insurance, home insurance India, house insurance India, house insurance policy,

Source fom: https://www.policymantra.com/blog/natural-calamities-leading-to-growing-need-for-home-insurance/