10 things to know before buying home insurance

10 things to know before buying home insurance

Getting life, health, or auto insurance seems like a no-brainer. But turn the scene over to house insurance and there aren’t many takers.

It is commendable that you have decided to purchase home insurance. The right plan will keep both your home and its contents insured and help ease your worries in the event of unfavorable and unforeseen circumstances.

Here, we discuss 10 important points to consider before buying home insurance.

1. Don’t settle for any insurance company

The marketplace has many insurance companies vying for your attention, offering you a wide variety of options. So why choose the first home insurer that comes your way?

Typically, you should shortlist three to four home insurers and then choose wisely the one with the most financial credibility.

2. Make the right coverage decision

You need to make sure you are covered for the correct amount. Your insurance provider will usually determine how much coverage you will need. But ultimately you need to take the call, as it will determine the sum you will need to pay in the event of a calamity.

The better the coverage, the less you will have to pay.

3. Choose your coverage term wisely

You generally have two options, annual and multi-year coverage. Opt for annual cover if you want to review your sum insured each year to see if it meets your needs. Multi-year coverage, on the other hand, helps you take advantage of deep discounts.

4.Protection for both home and content

It is important that you know that both your house and your belongings can be protected by your home insurance plan. Ask your home insurer to provide you with the best possible scheme.

5. Home Insurance Covers a Wide Range of Incidents

Insurance can cover a wide range of incidents, including theft, fire, flood, earthquake, hurricane, landslide, lightning, hazmat explosion, etc. Knowing about these cases will help you understand when you can file claims.

6. The few that are not covered

If your property is illegal, you cannot file claims. The insurance plan is voided if you or your household have been directly or indirectly involved in an incident causing loss or damage.

7. The rebuild value of your home is important.

The amount insured is based on the rebuild value of your home, not the market value. The rebuild value takes into account the cost incurred after the damage. The value of the contents of your home is based on the future depreciation value.

8. Insurer service quality issues

You don’t want to be chasing your insurer at a time of loss or damage to your home and belongings. The least you should expect is a sympathetic and friendly insurer to help you at that time.

9. Your home insurance needs a makeover every year

Check with your insurer each year if the sum insured is adequate. You may have remodeled your home, added a room, or opted for new insulation. These costs will eventually add up and your sum insured may fall short.

10. Understand what’s in your home insurance policy

You should know what is written in your home insurance policy, as it is an acknowledgment of your rights and responsibilities as an insurer. Be sure to keep it safe and readily available for future use.

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