My salary is Rs 15 lakh per annum and I own a house that is mortgaged with a bank. How much cover should I take for my house?
The sum insured for a building should be equal to the reinstatement cost of the building
My salary is Rs 15 lakh per annum and I own a house that is mortgaged with a bank. How much cover should I take for my house?
Mukund Sethi, Gurugram
Generally, the sum insured for a building should be equal to the reinstatement cost of the building. This is the cost that you are likely to incur to re-construct the building with the existing specifications. While insuring the house, please keep in mind that market value of any property comprises of the value of land and the cost of building. Since the land is indestructible it need not be insured. Only the cost of the building should be insured. And, if you are living in the same house, include the contents of the house and other valuable belongings.