Irrespective of whether your house is a tiny cottage or a large villa or bungalow; it is one of your most precious and valuable assets. It is where you find your ultimate peace of mind; can relax completely and feel entirely at ease. In short, it is no less than a castle for you. It is also the most critical asset that you look forward to passing on to your future generations. With this vital aspect in mind; it is essential that you take all measures to protect it against any unforeseen disasters via home insurance. Here, we would walk you through few basic concepts of home insurance.
Getting a fundamental perspective of home insurance
While everybody dreams of owning a home; it becomes a reality for just a few. You are amongst those lucky few. But you are well aware of the hard labor and your lifetime earnings that have gone into building that house to realize that dream. It might have taken your entire life to build that house but a single moment of a catastrophic event like an earthquake is enough to bring it to shambles. The consequence would be an intense financial as well as emotional loss. Your arsenal against this potential loss is home insurance.
In simple terms, home insurance is the coverage and protection that you take for your home and its attached assets against any such unforeseen event which can cause intense damage to it.
Things typically covered in a home insurance
Home insurance policies and the risks that it covers vary from insurance provider to insurance provider. Usually, it is a comprehensive policy, but each company has its own inclusions and exclusions. However, there are some basics which are covered by most standard policies. These are:
- Any damage to the house structure that can be repaired.
- Damage to the property and its attached assets due to theft.
- Personal liability insurance coverage.
Apart from it, the home insurance policy can be customized to cover various risks and assets like:
- Home/Auto package discounts
- In-home business
- Fine Jewelry
- Fine Art
- Breakdown of electrical and mechanical appliances etc.
Despite all coverage, it’s important to note that you are covered only till that amount that you have selected for covered losses at the time of purchasing the policy. The limits can be changed at any time and lowered or raised as the case may be.
What does a home insurance policy not cover?
Similar to having its list of inclusions; a home insurance policy has its list of exclusions. Little typical exclusion includes loss and damage caused by normal wear and tear; damage due to animals, termites, sinkholes, sewer backups, damage due to war, nuclear radiations, etc. Additionally, it does not cover any damage or losses which cost less than your deductible. You also know that additional costs beyond your policy quoted amount are not covered. However, it can be covered if you are opting for an umbrella policy. The policy might also become void if the home is unoccupied for certain duration of time as specified by the policy terms and conditions.
Who should buy a home insurance?
Anybody who owns a house or any kind of home building should protect his investment by opting for a home insurance policy. The reason to take it is similar to arguments of purchasing a health or a car insurance policy. It might not be sufficient in some cases but it certainly is significant.
Subsidizing your home insurance premium
The premium of a home insurance policy depends on number of factors like the initial cost of the building; the age and size of the building etc. You can reduce the home insurance premium amount by:
- Opting for a cover of longer time period like for ten years.
- Installing a robust security system in your house.
- Combining your home insurance policy with your car policy
- Raising your deductibles.
Like with any other policies, the variations are quite significant in home policies provided by different insurance companies. Thus, whenever you decide to opt for a home insurance policy, it is crucial that you compare and contrast offers by different companies; read their terms and conditions well to understand their inclusions and exclusions before choosing one for your home protection.