Buying a home is a wonderful milestone to achieve in life. It is known to cause stress not only financially but also in terms of responsibilities of owning property and caring for it. As with any major investment, insurance will protect the asset from risk of associated losses or potential setbacks. Home insurance is a boon for those wanting the security of protection for their asset. But with the number of Home Insurance policy providers, it is not too easy to make the right choice. With the numerous choices available, most people have difficulty in choosing the right policy for their homes. Although most of the home insurance policies provide an exhaustive cover, it is always best to customize it to suit your requirement. This will ensure that what you pay for fulfils your purpose of buying home insurance perfectly.
Here are some of the top tips to help you decide on the right home insurance policy best suited for your home requirements.
UNDERSTANDING THE POLICY:
Most people buying home insurance or looking to avail one, don’t have a proper understanding of home insurance. Most people take their insurer’s word for it and do not even take time to read through the policy, coverage, and most importantly, the terms and conditions of the insurance policy.
IDENTIFY YOUR REQUIREMENTS:
It is ideal to take time to identify your requirements before you start looking for home insurance just like making list for shopping before leaving for shopping. Identifying your requirements will give you a confidence and put you in a position where you can make sense of the various policies available and make a better deal. It is advisable to read thoroughly about home insurance to fully understand the policies and how to choose one that is best for you. Due diligence is the key to buying the right home insurance.
GO WINDOW SHOPPING:
Once you understand your requirements, start looking for reputable insurance providers and read up their policies that have been made available online by most insurance providers. After that, make a list of all the policies that you feel match your requirements, compare the policies online or with an agent in terms of coverage, limitations, deductibles, exclusions, price, and the premium. set up appointments with various insurance policies and find the best among them.
RESEARCH THE INSURER:
Before you make your mind about your choice of insurer, take time to do complete research on the insurer provider. It is better to do complete research on the financial background of your insurer before you apply for property insurance. This will give you confidence that you’re choosing a safe service provider. Apart from that, it is also advisable to read up on their claim history and see that the claims have been met by the insurer as promised.
CUSTOMIZE YOUR POLICY:
Apart from the various policies available, insurance providers also provide you with a wide range of add-ons to your policy. If you have a feeling that your insurance coverage does not cover all your contents, you can include add-ons. The add-ons could increase your coverage at an additional cost. This will enable you to insure all your invaluable assets under one cover.
HOW TO CALCULATE PROPERTY INSURANCE COSTS?
When you apply for property insurance, calculating your home insurance premium is as important as choosing the right policy and insurer. This will give you a clear idea of the amount of money that you spending for the insurance on monthly basis for the premiums. Also, calculating your home insurance cost will save you from being over-insured or under-insured.
The following are the factors that determine home insurance cost:
The type of plan you choose makes all the difference. Based on the extent of coverage, the price might vary. If you choose to insure just your house, the value of the structure of the house will be taken into account. If you choose to insure the contents of the house, then the value of jewellery and other personal belongings will be taken into consideration.
The value of the building refers to the reconstruction cost and not the market value of the house. And for the building value, you can multiply the built-area of your home and the construction rate per square feet. While calculating the cost of home insurance coverage, the value of Contents and jewellery must be calculated to make sure the coverage is sufficient enough to replace these contents.
As for the premium is concerned, the following are the factors taken into consideration – a type of ownership (owned or rented); the value of the building, cost of contents and jewellery and add-ons opted.
Breaking it down:
The first step to recognize potential ways to save is to understand how the property insurance providers draft their scheme. Let us consider a small house designed for nuclear family without many other added structures in the premises. Normally, an insurance plan for such a house will entail at least three key coverage sections: the building, individual assets of those residing in the house and accountability.
The next coverage is for your valuable assets such as furniture, housewares, appliances, jewellery, rare relic collections, firearms and more with specified limit.
Then comes the third component, which is the cover for legal responsibility, which would defend you legally and financially if somebody who is harmed from your house or premises choose to sue you.
Sizing up coverage requirements:
Your housing insurance rates are greatly dependent on how much cover you think you want and figure out which ones you do not want. Your insurance provider will furnish the amount of cover required to completely rebuild your home. Construction expenses are as fluctuating as it comes and hence it would be a smart move to review your plan every year and ensure that the cover and the current value do not have a large gap.
Shopping around until you drop (or don’t!):
It is common for house owners to simply get in touch with any insurance agent or someone who recommends a couple of companies. But it is not advised as much has to be left to chances. Please remember to compare the same insurance cover from company to company.
You can do the traditional method of shortlisting a few policies in your budget and then narrow them down according to the covers offered and their track record in addressing consumer grievances. This way you can avoid going through an agent altogether and deal directly with the insurance firm.
Do not get too comfortable with the same company or the quote. Being up to date puts you in a better position to bargain and negotiate in future.
Considering a bigger deductible:
Surprisingly, a most recent survey hinted that increasing the deductible can bring down the yearly premium considerably. However, please do not increase your deductible unless you have sufficient funds saved to cover it in a possible claim-worthy incident. This can work in your favour because the chances are that you will not be filing many trivial claims anyway.
Insurers also tend to drop clients who file for more than 2-3 claims annually. It would be much economical paying for small items by yourself.
A few more pointers on choosing ‘the one’:
If you are getting your vehicle insurance and home insurance, you might unexpectedly save some extra thousand bucks. This is because most companies offer attractive rebates for customers with multiple plans with them. Once you get a few rational quotes, you can do a basic background check- their ratings, checking out online forums and talking to other customers about its efficiency and swiftness if you can and so on.
Ensure that your policy is always up to date. Keep your insurance company in the loop even when you renovate your kitchen or purchase a pricy artefact for your home. And finally, unless the housing prices drop, do not hurry to deduct your coverage because the building costs will remain the same.
