Important Things to Know About Home Insurance
What is Home Insurance? Home insurance is also referred to as Homeowner’s Insurance. It is one of the kinds of property insurance that provides insurance to private homes. It is a property insurance that provides protection to your home or possessions in the home against damages. It also extends itself to provide liability coverage against accidents in home or on property.
However, protection against some events like floods, earthquakes commonly considered as Acts of God or other as Acts of War or willful destruction of property externally or internally do not form a part of Homeowners Insurance. If you are living in some part of the country that is specifically prone to earthquakes and floods then you may include extra policies in order to add on to your peace and well being.
It is a suggested measure of protecting your home from the unforeseen disasters and uncertainties that can hit your dream place. It is a multiple-line insurance that comes with both property insurance and liability coverage and you pay a single premium. Home insurance is however a kind of term contract that lasts for a fixed period. The amount of premium that would be paid by you is primarily determined by the location of your house. Lower premiums are charged if it appears that your home is less likely to be destroyed or damaged.
Things to know about Home Insurance
- The very first thing that you need to know about home insurance is its meaning and its importance. As discussed earlier, home insurance provides you with security and peace of mind when it comes to securing your most valued asset called “HOME”. It is important for you to safeguard your home from unforeseen events that may pose a danger to your property and people.
- Homeowners Insurance also provides coverage not only to the exteriors of your house but also to the interiors. It provides you with compensation if your home has been damaged externally or internally by fire, vandalism, lightning etc.
- If an insured disaster hits upon you, your appliances, furniture, clothing etc also get a cover under home insurance. There is a provision for obtaining off-premises coverage wherein if you have lost some stuff like precious stones or ornaments even away from your home, you can file for a claim and will still be compensated for the same.
- Those of you who live in areas that are exposed to damages and disasters may have to pay higher premiums when it comes to providing your home with coverage.
- While choosing your home insurance it is important for you to opt for a policy that provides you as many multiple policy discounts as policy. This helps you in covering more elements prone to damage at nominal premiums.
- If your future plan is to construct a swimming pool or something similar that may prove to be injurious in your home, then remember there will be a considerable rise in the annual home insurance cost.
- Those of you who have already settled your mortgages have a fairer chance of getting lower premiums when you opt for a home insurance as compared to those who are still to write-off their debts.
- Opting for “Guaranteed Replacement Value” would work in your favor. This means whenever any disaster strikes your place then irrespective of the cost, you can go ahead with re-building your place.
- It is also important for you to compare the deductibles while you choose your homeowners insurance.
- You may face an option of choosing from replacement cost or actual cash value while you select your plan. Replacement cost is the amount that is required in order to rebuild or repair damages with similar material or quality products without subtracting depreciation whereas actual cash value is the amount required for the same after subtracting depreciation. Make sure to insure your home with major portion of replacement value.
- Like life insurances, you need to do extensive research while choosing your plan. Compare various plans being offered by different companies and pick the best one that serves your purpose.
- You can not ignore the policy documents just on someone’s assurance. As it is a legal contract, all terms and conditions are clearly mentioned on the policy documents. It is important for you to be well versed with the inclusions and exclusions of the plan. So read the documents carefully.
- There are plans that set limits to the maximum that the company will pay to cover jewelry, furniture, appliances etc. Different insurance providers have different limits for the plans that they offer. Before you lay your hands on a specific plan, check the coverage limit that it offers.
- Will your home be getting coverage in the event of terrorist attacks? The answer is Yes, but for that you will have to opt for a rider cover that is available with most of the insurance companies.
- It is always advisable to have everything documented and all documents handy, if you wish to claim your reimbursements on time and without any hassle.
- It is important to keep yourself updated, which includes comparing your home insurance policy with others from time to time in order to check if you are getting the right benefit out of the cost that you are paying or is it time to switch.
Having said this does not mean that you need not take care of your home and its belongings. It is your home and you need to make it a safe place to live in by installing cameras, lockers, smoke detectors etc that can ensure safety and security of your home.
However, you can not ignore home insurance when you are planning your finances. It is important to go in for a home insurance for your house, as who knows it better than you how difficult it is to have a home of your own.
But it goes without saying how important it is to pick and choose a comprehensive home insurance plan that provides you with maximum benefits and makes you shell out nominal price.
Contributed By: Megha Sharma
Megha Sharma works as a guest lecturer in Delhi. She holds an MBA & Doctorate from the UPTU. With extensive knowledge and experience in various financial products, she also works as a consultant in banking & finance domains wherein she offers advice to her clients in managing personal finance.
- Rajnesh:Can you tell process of Home Insurance in Ghaziabad25-Apr-2013 03:26 PMReply