When you are in the process of buying a home, it is ideal to take each and every relevant aspect into consideration – the property rates and taxes, the most preferred locations, the utilities being offered, state of the neighborhoods, home finance options, and many other allied factors. But the one thing that you often tend to overlook, an important part of your home-buying process, is the Home Insurance.
Insurance forms an integral part of your assets, health, and travel, to name a few. The essential idea behind going for Insurance is to protect you financially in the event of an exigency. If something unfortunate occurs, Insurance can be a lifesaver for you.
You wouldn’t ply on the road without Motor Insurance, but when it comes to your home, you wouldn’t worry too much about getting insurance. Is it because it is not mandated by law? Well, if that had been the case, everyone would get sincere about it. Even more importantly, your home is a very high value asset, probably the biggest one you have, so why such nonchalance when it comes to insuring it?
Securing your home with Insurance means staying financially prepared to face any future disaster. If you are buying a house, understanding how Home Insurance can safeguard you and your assets is particularly important.
The ABC’s of Home Insurance
Buying a home is a hefty investment. If anything disastrous were to happen to the house you are living in, you will end up burning a hole in your pocket. So, staying prepared with a Home Insurance, at any given point of time, is a wise decision.
Having a Home Insurance financially secures your home and its contents against natural or manmade perils. It includes:
This cover secures your building against damage or destruction due to a list of perils, including fire or smoke, rainwater, etc.
• Home Contents Cover
Contents Cover protects the movables in your home; such as furniture, machines, jewellery, etc. against a number of natural and manmade calamities.
Why should you buy Home Insurance?
There are two major reasons that make Home Insurance such an important purchase:
• Asset Protection
Home Insurance covers your home and its belongings, as well as any third-party liability.
• To satisfy your loan provider
Many Home Loan providers require you to have Home Insurance till you have a loan and to list them as the mortgagee on the policy.
What does a Home Insurance Policy cover?
A standard Home Insurance policy will cover costs related to:
• Damage to the structure of your house
This cover compensates for the damage to your house structure and other things attached to your house. This can include damage to fittings; such as plumbing, wiring, heating, etc. In the event of damage due to fire, lightning, theft, vandalism or other covered disasters, you will be compensated for repairs or rebuilding your house.
Here it must be noted that damage due to floods, earthquakes, negligence and poor maintenance is generally not covered and you may require additional covers for the same.
• Loss or damage to contents of your house
Here, the contents of your home; including, furniture, appliances, clothing etc. are secured against certain mentioned perils. You can also get cover for precious items like lost jewellery, cash, important papers, etc.
• Third-party liability
This covers you for the financial loss if you are responsible for injuries or damages to a third party. And yes, this cover includes your pets as well! If your pet dog bites your neighbor and she were to file a claim against you, your insurer will take care of her medical bills.
• Accommodation expenses while your home is being rebuilt or repaired
A catastrophic flood struck your city and your home was completely washed away. Thankfully for you, you had a flood protection rider in your Home Insurance policy. You can claim for a repair or complete rebuild based upon the condition of your property. But till the time your house is repaired or rebuilt, you will require a place to stay.
This part of Home Insurance reimburses for the cost of your accommodation rents for the time you are unable to live in your house.
What a Home Insurance Policy does not cover
Having discussed the coverage, understanding the exclusions is equally important. A few conditions which Home Insurance policy does not cover include:
• Loss or damage caused due to:
When is the right time to buy Home Insurance?
As soon as you buy your home! And if you are already residing somewhere at present, don’t wait too long to get your home insured. The sooner you act, the better it will be. Visit your insurer and get an estimate on the Insurance Premium. But before you buy Home Insurance, take your time to understand your requirements and to select an insurance provider that ticks all the boxes.